Corporate responsibility: Why don't they trust you with CSR?

CSR should be an intrinsic part of modern brand management, which means marketing and CSR departments need to work together. But for many marketers, ethics may as well be a foreign language and in most companies, the marketing and CSR departments sit on opposite sides of business with little, if any, communication between them.

The creation of government regulation requiring companies to outline their CSR activities in their end-of-year financials has widened that communication divide, with many CSR departments becoming aligned with the finance division, and in some cases directly with the board, rather than marketers.

'Do marketers get it? It is getting better, but I'd say there is still a knowledge gap,' says Brendan May, head of corporate responsibility and sustainability at Weber Shandwick Worldwide. 'The problem is that marketers often get very excited about products and attributes that, essentially, are quite dull. They do not see the fresh angles that embracing a CSR message can provide. There is only so much you can say about price and quality. What marketers should be doing is telling the brand's story, or the journey of the product. Increasingly, its what consumers want to hear.'

Eighty per cent of FTSE 100 companies now employ specialist CSR directors and issue annual CSR reports, and its importance as a business function threatens to rival, or even surpass, marketing. It may not command the same level of investment, but it has a clear impact on profitability. According to the Co-Operative Bank's 'Ethical Consumerism Report 2005', the UK market for ethical goods was worth £24.7bn in 2004 and is growing at 15% per year, suggesting it will soon top £30bn.

CSR is not limited to the creation of ethical products. Public demand now requires companies to show they are putting something back into the community by providing support for ethically-led activities, and brands that don't tap into the trend are missing out. 'One thing is clear: if you introduce ethics or environment into a brand it is likely to sell a lot better than if you don't', says May. 'Multinationals are queuing up to buy the brands that are doing this well, such as Cadbury with Green & Black's.'

Diana Verde Nieto, managing director of Clownfish, a branding consultancy specialising in social and environmental responsibility, suggests that although some brands are successfully integrating CSR, many more are failing to seize its full potential. 'People are demanding brands that are not only good for them, but good for others as well. CSR departments are equipped with a language and set of values to support this movement, but marketers have not been paying attention,' she says. 'With today's savvy and cynical consumer and a very crowded media landscape, brand communication must be an expression of authentic values and beliefs - words and actions must be perfectly aligned. This means shifting the focus of planning away from campaigns and toward longer-term programmes in which consumers are treated as partners.'

The long-term strategy of building reputation is anathema to how many brand managers plan and budget, which means an alternative process is required to factor CSR in.

Jon Chandler, former regional communications and public affairs director for Coca-Cola in Europe, and now regional director of corporate communication for Europe, Middle East and Africa at strategic communications agency APCO Worldwide, says that maintaining the balance between CSR and marketing in a large brand-led organisation can be a great challenge. 'The key is that marketing tends to plan against what it knows, in terms of consumer expectations and needs, as opposed to the wider implications of what that product might mean to competitors, regulators, NGOs or consumers who increasingly care about who makes their product, how and where,' he says.

'Marketers are open to embracing CSR, but the problem is systematic. The timescales and returns on investment in CSR and reputation have a longer profile, and may not be in the domain of the brand manager,' he adds. 'Ultimately, it should not be a question of budgets, it should involve a long-term view of the future of the brand.'

Coca-Cola's ill-fated launch of processed water brand Dasani in 2004 - the product was withdrawn after it was revealed that it was bottled in Sidcup, a state of affairs compounded by a contamination scare - exemplifies the lack of integration between CSR and marketing. Coca-Cola was convinced consumers were more concerned with the lifestyle statement of the brand than where it came from. When it emerged that the opposite was true, the lack of real-world planning and appreciation of the responsibility issues left Dasani's carefully constructed brand architecture to crumble.

For heavily process-driven brand owners, it is easy to see how the call to embed the CSR mantra into brand management can destabilise established practices and structures - which means marketers would rather leave it alone.

Unilever's development of a tool to help it integrate CSR into its core brand processes reveals the upheaval needed. 'There is a huge amount of consumer insight, planning and innovation that goes into building our brands,' says Santiago Gowland, director, global corporate responsibility, at Unilever. 'To embed CSR into our marketing process, we need to work through each existing process and identify where there might be a sustainability or responsibility insight missing. If you just add on CSR at the end, it will not resonate with the brand.'

Unilever's CSR integration tool is designed to work at brand level as well as across categories. 'It is a tool to ensure that this thinking is rooted in the business, not the CSR department,' adds Gowland. He argues that any tension between marketing and CSR within an organisation is usually rooted in not see- ing the business advantages of an ethics-integrated strategy. 'Social and environmental challenges are often seen as being in conflict with profitability, rather than a source of innovation and competitive advantage,' he says.

The time it can take to successfully embed CSR into a brand, then see a return on that investment, is illustrated by banana company Chiquita. One of the world's biggest importers of bananas, Chiquita oversees a maze of local labour partnerships. Anticipating that its European business was going to be threatened by lower-priced competitors, Chiquita began overhauling its entire sourcing infrastructure around ethical credentials. This process, which cost the firm $20m, began in 1992, and culminated with certification by the Rainforest Alliance in 2000. However, it only began to actively communicate a sustainability and responsibility message to consumers in 2005.

'Our motto was "Create facts first",' says George Jaksch, Chiquita's senior director of corporate responsibility and public affairs. 'We were not going to promote an ethical message until we were absolutely sure we had built a solid foundation. In Europe it has been a highly effective strategy.'

CSR, then, must be rooted deep in the company's psyche, which means that short-term gain must take a clear second place to long-term thinking. Yet even firms with less obvious ethical credentials than Chiquita are grasping the nettle. Marks & Spencer is another firm seeing its long-term investment in sustainability starting to pay off. A recent report by City analysts Citigroup said the retailer's recent 'Look behind the label' activity has been its most successful to date, generating a significantly positive response in a twice-yearly brand awareness study. M&S overall sales were up 10.5% compared with the previous quarter and the ads are credited with playing a strong role in the retailer's good fortunes.

Susan Aubrey-Cound, group head of marketing campaigns for M&S, agrees that the ads have 'had a significant effect for a small investment'. She says ethics and social responsibility have 'always been part of our brand values and how we trade.' However, it is interesting that M&S only decided to run 'Look behind the label' after it had achieved its first marketing goal of repositioning and modernising its food and clothing offer.

This suggests that even for a CSR-integrated company such as M&S, ethics plays second fiddle to traditional marketing objectives. 'We knew our first job was to reposition our products. Customers were not going to believe us on other issues ahead of that. But once we were happy with how that advertising was going, we felt we had another story to tell,' says Aubrey-Cound. 'You can't just put a campaign like that out without a very long-term strategy behind it. Anyone can come up with messages, but it is harder to deliver on them.'

So crucial has CSR become to business strategy - not only ethically, but also in terms of delivering profitability - that many argue there is no longer a case for keeping CSR and marketing separate. John Drummond, chief executive of consultancy Corporate Culture, concludes: 'If we accept that customers are driving the business agenda, CSR needs to be aligned with the core purpose and strategy of the company. If CSR is aligned to strategy, it is aligned to marketing. There shouldn't be any conflict between the departments - in fact, they should not be in different departments at all.'

For all the talk, marketers will have to proactively bridge the divide and embrace CSR or they will continue to be the poorer relation in influencing their company's direction.

REMIT OF CSR WITHIN A COMPANY

• State and communicate the corporate responsibility standards that guide the company's decisions and the behaviour of its management and staff


• Review the risks associated with this strategy, including the risk of breaching CSR guidelines


• Approve strategies that create value over the long-term, both tangible and intangible


• Put in place and manage effective self-regulation. Create a culture of integrity that permeates the whole organisation


• Recognise success and motivate employees through rewards


• Manage communication and the expectations of external stakeholders.