Corporate Social Responsibility – nothing but a hygiene factor? (Part 1)
25. März 2019 ▪ Reading time: approx. 3:10 min.
“Corporate Social Responsibility (CSR)” has become common sense, companies can no longer use it to attract positive attention. Where can CSR go from here? What successful examples are there? Why are the new impact brands so popular with millennials and Generation Z – and what does this preference mean for traditional brands? In the three-part article “The post-CSR era – New expectations of companies and brands” we analyze this drastic change companies will have to face.
We consumers are so sensitized to the topic of sustainability that every violation immediately becomes a scandal.
How long have we, society, been concerned with social and ecological ills? There are numerous examples in our history of people fighting fierce battles for human rights, animal rights, and improvements in our environmental and social policies. Individually or in groups, they vigorously defend their values, with spectacular protests or rescue efforts, for instance.
During the second half of the 20th century, groups of activists began to get better organized. The 1960s and 1970s spawned several "non-governmental organizations", better-known these days as NGOs. These are private, independent, non-profit organizations that pursue a social or socio-political goal.
The rise of NGOs
During the refugee crises, such organizations drew particular attention: Amnesty International, WWF, Greenpeace or Human Rights Watch became strong brands thanks to their clear stance – you could almost call it an "ideology" – and their actions. They have made it their purpose to correct injustice and wrongdoing in the world.
Because NGOs don't operate on profit-earning business models, they depend on financial aid. They ask for support – and their benefactors hope that their donations will help to make the world a little bit better.
However: Making the world a better place is a responsibility we have assigned not just to NGOs.
Companies and brands have to step up
We consumers are becoming more and more critical in our consumption. We ask where products come from and under what conditions they were produced. We calculate our ecological footprint and expect companies to do the same. We want them to take on social and ecological responsibility beyond the legal minimum.
No company today can do without declaring its social or ecological commitment. Corporate social responsibility (CSR) has become the standard. Accordingly, CSR reports are a fixed component of corporate reporting – and in some cases a proven tool used by the PR department to polish up the company's image.
Donation drives, partnerships with aid organizations or environmental protection measures are part of good manners these days. Christmas presents for employees are history, we are donating now. Recycling paper in the printer and a Dyson Airblade in the rest room, no more paper towels. Why? Because the CSR handbook says so. Fair treatment of employees and suppliers is a matter of course – as well as lowest possible emissions in production.
Lego and Adidas – two credible examples
We consumers are so sensitized to the topic of sustainability that every violation immediately becomes a scandal – a few years ago, hardly anyone was interested. Many bad examples have led us to question everything. Greenwashing and self-serving motives are immediately exposed, as in the case of AmazonSmile: What was advertised as support of social organizations turned out to be cost savings for the company.
The VW group also claimed great commitment to "sustainability" and "responsibility", but it seems that was just empty phrases. The scandal around manipulated exhaust emissions plunged the corporation into its most severe crisis in its history, which so far has cost them 28 billion euros. The scandal also cost them a great deal of credibility: In the Sustainability Image Scores (SIS), the group plummeted from rank 16 (2015) to 88 (2016) – and one year later to rank 103.
Of course there are companies and brands who take corporate social responsibility seriously and embed it deeply in their core. LEGO® for instance has declared the mission that "by 2030 all Lego blocks and packaging materials will be produced from sustainable materials." The brand's "Sustainable Materials Center" proves that this is not an empty promise: Since 2018, accessories like bushes and trees are produced in accordance with the mission statement.
At adidas as well, the quest for sustainability goes beyond reducing CO2 emissions and waste: it has been applied to the products themselves, as demonstrated by the Better Cotton Initiative – the brand uses only sustainably produced cotton. Then there is the cooperation with an organization called "Parley for the Oceans", which involves Adidas producing clothing and shoes from recycled plastic that was fished out of the ocean. While in 2018 they produced 5 million shoes that way, the target for 2019 is 11 million pairs.
Of course such social and ecological commitment is commendable. But we consumers only give it a sympathetic nod at best. We consider CSR measures to be part of the minimum requirement, so it is becoming more and more difficult for companies and brands to stand out. So now what?
Campaigns reach the next level
In the field of marketing an evolution of the idea of CSR is emerging. There are powerful campaigns telling girls they can achieve anything (#LikeAGirl). They are mobilizing us against social marginalization (Airbnb – until we all belong) or racism. And who doesn't remember Nike's controversial campaign with former NFL quarterback Colin Kaepernick? All of them are designed to challenge us to take a closer look at the world, and to question and change supposed norms and stereotypes. To make the world a better place.
Even Super Bowl spots, the most expensive advertising films produced each year, are following this trend. In 2018, 25 % of them contained an appeal for CSR. For comparison: From 2008 to 2017, that number was a mere 6.4 %. Admittedly, this touches us emotionally and gets us thinking, but it's like everything else: If everybody does it, it becomes a habit – for us as consumers as well.
It is becoming clear that we are expecting more of brands. We want them to do more than "just" inform us and shake us up. So the question is: What's next?
In the 2nd part of the series "The post-CSR era – New expectations of companies and brands" you will find out how this development has generated a new species of brands that wants to change more than the market.