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Vol. 11, No. 26 | June 30, 2008
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 Aligning Corporate Responsibility and Brand
By Kellie A. McElhaney, Ph.D.
There’s no doubt that an effective corporate responsibility strategy — and the compelling communication of it — can impact your company’s bottom line.
Consider this story about Wal-Mart. After receiving Wal-Mart’s training on sustainability, Darrell Meyers, an employee in a North Carolina store, suggested that the company could save money and energy by removing lightbulbs from its vending machines, which stayed lit 24/7 and needed to be replaced from time to time by maintenance workers. Turns out, Meyers was right. When his idea percolated up to Wal-Mart’s corporate headquarters in Bentonville, Arkansas, someone ran the numbers and estimated that Darrell’s suggestion would save the company more than US$1 million a year. Today, you’d be hard-pressed to find an illuminated vending machine in any Wal-Mart store or office.
Although many companies actually have been increasing CSR efforts to improve education, healthcare and environmental efficiencies, most are not talking about it. The result is that the average consumer, employee, governmental regulator or supplier has no idea what the company is doing — which means stakeholders cannot factor the company’s CSR efforts into their decision to engage with or buy from the company.
In order to build CSR into your brand, or capitalize on it as a viable sub-brand, I propose the following seven principles:
- Know Thyself: Link your CSR strategy to your company’s core competencies to get senior leadership support. This will protect your CSR strategy and enhance its value. For example, if you’re in a telecom company whose CEO is focused on growth, and you intend to launch CSR initiatives related to education and youth, demonstrate to your company’s leadership how these initiatives can be an entrance strategy for new markets.
- Get a Good Fit: It’s tough to select just one social or environmental cause to champion when every one is worthy, needed and critical. Your job is simple: Pick a social or environmental challenge for which you own part of the solution (or helped to cause it). For example, tackling homelessness and partnering with Habitat for Humanity, a nonprofit that builds houses, is a perfect fit for appliance-maker Whirlpool. It behooves Whirlpool to have as many homes as possible buying their home appliances.
- Be Consistent: Ensure that your company always tells your CSR story the same way, regardless of whether it appears in CEO speeches, recruitment and retention strategies, traditional advertising and marketing channels, in-store point-of-sale branding outlets or in new market entrance strategies. To do this, give your CSR strategy a catchy name, and define it simply so that people throughout your business system can adopt it. This does not mean making up new business or operational systems; rather, embed one CSR story into your already existing communications and operations.
- Simplify: The critical masses do not grasp carbon sequestration, carbon storage or carbon trading. They may not even fully understand things like fair trade, human rights in supply chains or living wage. Instead, employ simple yet eloquent language, as the pet food manufacturer Pedigree did when launching its CSR partnership with the Society for the Prevention of Cruelty to Animals (SPCA). The campaign, meant to help homeless dogs find loving homes, had a simple catchphrase: “Help Us Help Dogs.”
- Work from the Inside Out: To employees who are educated about it, CSR is like a drug: Give them a little, and they’ll want a whole lot more. Start by educating your employees about your CSR strategy. Your employees are not only your biggest (and most efficient) brand ambassadors; eventually, they may come to you with better CSR ideas and strategies, just like Wal-Mart’s Meyers.
- Know Your Customer: Not every customer segment is as ready for CSR stories as others. A few have proved to be very ready: women, millennials (people currently between the ages of 8 and 24), LGBT (lesbian, gay, bisexual and transgender individuals) and conscious consumers. Start with a laser-sharp focus on communications linked to products and services targeting these segments.
- Tell Your Story: Bottom line: You must communicate your message. By not communicating, not only are you missing an extremely powerful business opportunity, you are sending the message that you’re doing nothing in the CSR space. And if you neglect to spread the word, a company who has been at CSR for a far shorter time, and far less substantively, will race forward, communicate and grab your market share.
As a company leader, you have a powerful opportunity to integrate CSR into your brand, which will positively impact consumers, employees, suppliers, retailers, governments and communities. Lose the fear, embrace the risk (after all, everything in business is risky) and go to it!
Kellie A. McElhaney, Ph.D., is Executive Director and Adjunct Assistant Professor of the Center for Responsible Business at Haas School of Business at University of California, Berkeley. This article is excerpted from McElhaney’s fall 2008 book, Just Good Business: The Strategic Guide to Aligning Corporate Responsibility and Brand (Berrett-Koehler). For more information, contact Kellie A. McElhaney at kmack@haas.berkeley.edu.
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Featured Event
BSR-BERKELEY CORPORATE RESPONSIBILITY LEADERSHIP WORKSHOP
Embedding CR in Your Operations and Management
July 8-9, 2008
Berkeley, California, United States
Learn to strategize, develop and deliver a corporate responsibility implementation plan at the two-day workshop brought to you by BSR and UC Berkeley’s Center for Responsible Business and Center for Executive Development at the Haas School of Business. Join BSR President and CEO Aron Cramer and BSR Vice President, Advisory Services, Eric Olson, along with Haas Professor Kellie McElhaney and other senior executives in hands-on, highly interactive sessions that cover corporate responsibility in a shifting world, how to measure impact, how to communicate corporate responsibility and how to forecast the future of CSR. Register now.
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| U.S. Supreme Court Cuts Damages in Exxon Valdez Oil Spill
Last week, the U.S. Supreme Court reduced Exxon Mobil Corp.’s US$2.5 billion punitive damages to US$500 million for the 1989 Valdez disaster — a decision that could have broader implications for limiting how much courts can order businesses to pay. The court ruled that the nearly 33,000 victims who filed claims after an Exxon supertanker spilled 11 million gallons of crude oil into Alaska’s Prince William Sound would collect US$15,000 each; previously, they had been awarded an average of US$75,000. The court held that in maritime cases, the punitive damages could not exceed the compensatory damages, which in this case totaled US$507.5 million. In 1994 a jury decided Exxon should pay US$5 billion in punitive damages; in 2006, an appeals court cut the verdict in half. Business groups and the U.S. Chamber of Commerce hoped that the Supreme Court would use this case as a way to curb large punitive damages against corporations, but most legal experts say the scope of the decision is limited to maritime law. The case will go back to the U.S. District Court in Anchorage in the next several weeks.
U.K Mining Firm Defends Zimbabwe Investment Plans
In spite of government pressure on companies to withdraw from Zimbabwe, London-based mining giant Anglo American plc defended plans to develop a platinum mine in Zimbabwe — a project worth about US$400 million that could be the largest foreign investment in that country. Shareholders and politicians alike are concerned the planned platinum mine would help support the Zimbabwe regime. African and other world leaders have condemned last Friday’s tainted one-man presidential election that confirmed the continuation of Zimbabwean President Robert Mugabe’s rule; the main opposition leader withdrew from the runoff due to violence. According to Anglo the mine has been in development since 2003 and does not violate sanctions against Zimbabwe. “Anglo American is deeply concerned about the current political situation in Zimbabwe and condemns the violence and human rights abuses that are taking place,” the company said in a statement. Other companies, such as mining giant Rio Tinto Group and cigarette maker British American Tobacco p.l.c., announced they would remain in the country for the good of their local employees but would not make further investments.
Florida Plan to Buy Sugar Firm Could Save Everglades
In one of the largest land acquisitions in state history, Florida intends to spend US$1.75 billion — US$50 million in cash and US$1.7 billion in certificates of participation — to buy the assets of U.S. Sugar Corp., which includes a large chunk of the Everglades. Over a period of six years, U.S. Sugar, the nation’s largest sugarcane producer, will abandon 187,000 acres of farmland — including its sugar plantations, mill, refinery, citrus orchards and processing plant. Environmentalists, who have criticized the sugar industry for dumping fertilizer-tainted water into Florida’s famous “river of grass,” laud the purchase as the missing link in the Everglades’ restoration project. The land deal will revive efforts to turn sugarcane fields back into marshes and waterways, creating better water storage, protecting endangered wildlife, preventing fires and allowing for a redrawing of the US$8 billion Everglades restoration plan approved in 2000. The employee-owned company’s 1,900 workers are expected to approve the plan because of the potential compensation. Negotiations will begin on July 1 and should conclude within 75 days.
European Farm Ministers Agree to Restrict Pesticides
After two years of negotiating, European agricultural ministers agreed last week to draft rules restricting the use and marketing of pesticides proven to cause cancer, gene mutation or harm reproduction. However, in exceptional cases, hazardous substances may be used when alternatives do not effectively protect plants, but only under strictly regulated conditions for a maximum of five years. The European Crop Protection Association said the rules will negatively affect the production of many key crops in Europe, which will lead to "more expensive and more imported food." The environmental NGO Pesticide Action Network Europe claimed the agreement represents "a landmark in European health policy." Four EU member states — Romania, Hungary, Britain and Ireland — abstained from the discussion, arguing that these new restrictions would only exacerbate the current food crisis by reducing crop yields. The bill will now be approved on a regional basis and will move to the European Parliament for discussion, with debates starting in the fall.
Solar Attracts Big Business to the Sunny Side of Wall Street
Several of the world's largest technology and manufacturing companies — including Intel Corp. and International Business Machines Corp. — made major investments into the burgeoning solar power business, starting a trend as corporate giants look to capitalize on the growing demand for cleaner energy sources. Although solar power still comprises only a tiny fraction of the world's energy consumption, tech companies recognize the similarities between their own industry and technology-driven solar power and are now capitalizing on the new markets. "What the strategic players bring is that ability for large-scale manufacturing," said Kevin Genieser of Morgan Stanley's renewable energy investment banking practice. Many say that this corporate interest in developing more efficient solar power technologies lends new credibility to solar power.
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Report Spotlight: Natural Disasters
Recent Reports on the Private Sector’s Role in Climate Change, Natural Disasters and Human Rights
Nobody could have predicted the horrific devastation that hit China and Myanmar over the past few months. These two natural disasters — the earthquake in China and the cyclone in Myanmar — shed light on the inextricable links between climate change, natural disasters and human suffering, and recent reports can help corporate leaders identify the business risks and opportunities associated with these events. Download “Building Resilience to Natural Disasters: A Framework for Private Sector Engagement,” released by the World Economic Forum, and “Human Rights and Climate Change: A Rough Guide” by the International Council on Human Rights Policy to explore the impacts of climate change on human rights and how industries, in collaboration with governments and civil society, can strengthen global capacity to withstand natural disasters.
To learn more about this topic, please join us for BSR’s upcoming “Conversations with Newsmakers” teleconference, “After Disasters: the Corporate Response.”
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Smarter Technology Leading the Way to Low-Carbon Economy
By 2020, global industries — especially energy-intensive building, logistics, electricity and industrial sectors — that use smarter technologies can save up to US$800 billion in annual energy costs while reducing global greenhouse gas emissions by 15 percent. Read about these forecasts, and others, in the new report “SMART 2020: Enabling the Low Carbon Economy in the Information Age,” from the Global e-Sustainability Initiative (GeSI) and the Climate Group: www.theclimategroup.org/assets/resources/publications/Smart2020Report.pdf.
Mitigating Human Rights Risks for the Financial Industry
The new "CEO Briefing on Human Rights," published by the UNEP FI Human Rights Work Stream, explores key questions faced by companies in the finance sector, such as the applicability of international human rights law, specific human rights expectations and the business case for action. The briefing presents a practical framework for companies to assess and manage potential human rights risks. Access the full report here: www.unepfi.org/fileadmin/documents/CEOBriefingHumanRights.pdf.
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“CONVERSATIONS WITH NEWSMAKERS” TELECONFERENCE
After Disasters: the Corporate Response
Wednesday, July 2, 2008
8:30 a.m.-9:30 a.m. PDT
11:30 a.m.-12:30 p.m. EDT
5:30 p.m.-6:30 p.m. CEST
In the wake of recent natural disasters in China and Myanmar, how can companies respond to such tragedies in ways that are consistent with their overall commitments to health, human rights, poverty alleviation and other CSR issues?
Jointly organized by BSR and the Clinton Global Initiative, this one-hour teleconference — accessible by phone from any location — will feature the perspectives of business and NGO leaders from CARE, Clinton Global Initiative, Pfizer and Oxfam who are working together to address these urgent challenges today and in the future.
Please register for this free BSR member-only event to receive dial-in instructions. |
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