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If you have ethics, you’re in good company: why CSR is key to brand success

At the insistence of a consumer population increasingly concerned with corporate social responsibility, making a contribution to society is becoming a key consideration in the corporate strategies of brands and businesses. Jane Asscher, managing partner and chairman at 23red, looks at why brands need to be good in order to become great.

We’re living with the first generation who are CSR ‘natives’, that is to say young people who take it for granted that companies should deliver not just profits for their investors, but also make a contribution to society, and act responsibly vis-à-vis their environmental impact. For them this triple bottom line is normal.

The implications for a brand are profound: in order to be a great competitor in today’s marketplace it needs to be ‘good’. Research commissioned through Trajectory by 23red suggests that when considering a product or service purchase, 91% of people say “how good a company is” affects their decision. And 90% say “how it behaves towards its customers and communities” is influential.

But on the other hand, only 60% and 53% respectively say that “a company’s ethics – environmental, sourcing, sustainable, employment policies” and “the company donates a percentage of profits to charity and a good cause” are influential. These significantly lower percentages are the result of too much empty rhetoric and green-washing.

The brands that impress are those like Unilever, P&G, M&S, and IKEA who have ‘baked in’ CSR into their corporate DNA in a manner which makes it clear there’s no silver bullet, but that it’s all about having a commitment to an iterative process which tackles the issues systematically. Over the past few years these CSR market leaders have demonstrated to themselves, and their shareholders, that doing good can be good for business.

This effect is being seen in four main areas: firstly, the rigorous pursuit of environmental responsibility has often led to more cost-efficient ways of doing things. Secondly, in the competition for talented people, employer brands with strong ethical values are seeing improvements in recruitment and retention. As the IPA ‘Future of Talent’ report showed clearly, the new generation of employees has very different expectations from their prospective bosses. Human resources strategy needs to take account of these new attitudes and behaviours to win the war for talent.

Thirdly, product and service brands which provide the new kind of badge values are finding they’re attracting new customers and achieving tangible business success. For example P&G has done brilliantly with low temperature washing. Not that long ago Body Shop was unique on the High Street for its ethical retailing stance, but nowadays there are many who have an important CSR dimension, such as Specsavers, Morrisons, and Boots. And we’re seeing the rise of new brands whose proposition is largely dependent on giving something back. For example Tom’s Shoes which matches every pair purchased with a pair of new shoes given to a child in need.

Fourthly a deep-seated commitment to corporate social responsibility provides a brand with the invaluable ‘benefit of the doubt’ when something goes wrong. Effective crisis management is all about grasping the nettle as quickly and firmly as possible, taking the pain, apologising, and then delivering a positive resolution. So it’s much more likely that a company with an established CSR programme will be in a position to do this as top management will have anticipated many of the bear traps and figured out how to escape them.

In this maturing market we’re seeing a new kind of challenge. Many of the early adopters of CSR find themselves with a number of programmes which have accumulated over the years, often at the instigation of CEOs who have long-since departed. Recession–driven reviews of CSR strategies are weeding out non-performers and re-focusing efforts to ensure full alignment with the over-arching business strategy and deliver value-for-money. Nowadays to be a great brand, you’ve got to be good, and never let up on your continuous improvements to your triple bottom line.

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