Communicating Corporate Social Responsibility

EACA looks at the new challenge facing communications agencies.

Despite the bursting of the dot.com bubble, a new global economy is taking shape all around us. It is built on new forms of value creation and, as when consumers reacted to genetically modified foods, it is often colliding with both old and new values. As one controversy follows another, a new vocabulary is surfacing. Politicians and business leaders increasingly talk in terms of corporate social responsibility and sustainable development.

No-one doubts the importance of the issues being discussed, but the cold facts must be faced: to date, most governments and most businesses have broadly failed in their attempts to communicate these new agendas to voters, citizens and consumers.

Now a new wave of societal pressure is reshaping business thinking. This time, however, the effects are likely to run much deeper.

Business is being pressured, by governments as well as campaigners, to address a wide range of new accountability and corporate social responsibility (CSR) issues, some of which would once have been handled exclusively by governments. These include such areas as corporate governance, human rights, poverty, and a growing range of environmental issues, especially climate change.

But there's a double gap to be bridged, a gap in understanding and a performance gap. One problem is that the language of CSR is horribly opaque. It can confuse rather than communicate. It's a testament to the force of CSR that its messages still manage to get through, but there's no doubt its language is a problem.

The performance gap is just as tricky. Many businesses first encounter CSR in the context of brand: when the brand is in trouble. A company does, or fails to do, something that lands it in the CSR hot seat. In such cases, poor CSR performance poses a risk to corporate reputation and brand.

But CSR is now moving from the sphere of brand risk to brand opportunity. Smart companies are realising that good CSR performance can be a source of brand advantage. The exciting question now is not, how companies can protect their brands from reputation debacles, but how they can build brands aligned with strong CSR performance and global citizenship? Trust is critical to brand success, but trust is in short supply when it comes to CSR and that presents an opportunity for alert brand owners and their agencies.

The critical point is that the search for responsibility has moved from an ethical niche into the mainstream. Early leaders, like The Body Shop and Ben & Jerry's, promoted environmental, social and economic responsibility alongside their products. Today we have BP re-branded as moving 'Beyond Petroleum', while Toyota runs messages about green cars and sustainable mobility in its 'Today, Tomorrow, Toyota' campaign, and BASF promotes its contribution to saving energy.

The new emphasis being put on business agendas for CSR, global citizenship and sustainable development has huge implications for the commercial communications sector.

The critical point to keep in mind is that CSR need not restrain, but can, and should, open up new avenues for creativity. Society has a new range of concerns; companies have a new set of messages. This is an open invitation to communications agencies.

Values have been shifting, especially in the advertising-rich industrialised world, from a focus on material prosperity to one increasingly emphasising quality of life.

As Klaus Toepfer, Executive Director of the United Nations Environment Programme, has stated, "Consumers are increasingly interested in the 'world that lies behind' the product they buy. Apart from price and quality, they want to know how and where and by whom the product has been produced".

As a result, the concept of the triple bottom line (economic, social and environmental) has gained traction in the business world. Corporate reporting and communication has expanded into new areas.

In addition to the traditional financial reporting challenges, the economic bottom line embraces such issues as employment and other impacts on local communities. The social bottom line measures progress in areas such as diversity (e.g. age, gender and race) and working conditions. The environmental bottom line sums up a company's ecological footprint, in terms of the energy and raw materials used, the emissions and waste produced.

There are growing numbers of objective standards that give an assessment of a company's CSR performance, such as FTSE4Good, the Dow Jones Sustainability Index or AA1000.

Leading reporters now routinely cover economic, social and environmental issues and performance, together with the corporate governance systems and processes companies use to pull all these disparate dimensions together.

In fact, CSR reporting has become a growth industry. For example, we have seen a range of developments consolidate into the Global Reporting Initiative (GRI), launched in the US but now based in Amsterdam (www.globalreporting.org).

Although many companies start off on the defensive, the most successful recognise that even the darkest clouds can have silver linings. This growing opportunity is demonstrated by the focus in the reporting of sectors as diverse as insurance, pharmaceuticals and telecommunications.

Some advertisers have been getting CSR messages across, although there is a lot further to go before the industry could be judged to have taken the CSR plunge.

Recent examples include:

Shell - "Profits and Principles" - J Walter Thompson

In 1997, Shell made a public commitment to CSR. Since then the company has worked to turn this commitment into reality on the ground, aiming to integrate the concept into business activities with commitments to reduce greenhouse gas emissions and invest in renewable resources.

But the company says it felt misunderstood; many people didn't seem to understand their principles and practices well enough. So a new ad campaign was developed to illustrate Shell's approach to solving problems and meeting CSR challenges. This corporate campaign focuses on the Shell brand, rather than a particular product.

DuPont - "To Do List for the Planet" - McCann-Erickson

DuPont is another example of a multinational using CSR-based advertising to develop and position the corporate brand.

The company's research found that most people, including investors, customers, consumers and even employees, didn't fully understand what DuPont did, or how often it affected their lives. The goal of the campaign was to highlight its achievements in creating products that safely meet the basic human needs of health, food and shelter.

Ruhrgas -'Voll im Leben' campaign - Ogilvy & Mather Special

This is an example of a product campaign from a local German company, rather than a multinational. Ruhrgas AG, founded in 1925, is Germany's biggest natural gas supplier and marketer, selling not directly to consumers but to 18 regional gas suppliers and a few city-owned companies.

The campaign presented natural gas as the energy source of the future, emphasising its environmental friendliness, comfort, and reasonable cost. The signature is 'Voll im leben' or 'Life to its fullest' - with natural gas an obvious part of this daily life.

Yet, as recent survey work for the World Economic Forum (WEF) shows, there is still a dramatic lack of trust in democratic institutions and large companies, across the world^[1].

The European advertising and communication sector faces a great challenge - and opportunity: helping clients rebuild the trust lost in recent years.

We are looking forward to a period of significant change. On the client side, major structural changes will mean that Marketing and Corporate Affairs will no longer be completely separate functions, but will need to work more closely together. Marketing and advertising ARE corporate affairs.

Agencies will need to learn new skills. Communicating messages about both environmental and product performance benefits can lead to double-messaging that does not work. There is a need to learn how to communicate these things and to grow brand value in a new environment, whilst still selling product.

Agencies also need to understand that more is expected of them in terms of ethical standards and that these standards may evolve over time. If they miss that point, then the self-regulation system, which is vital to advertising freedom, will come under more and more pressure.

International organisations are also looking at the commercial communications sector with great expectations. For example, UNEP's Advertising and Communication Forum^[2] is a broad initiative which aims to use communication skills and techniques to promote sustainable consumption patterns, promote products, services and campaigns that foster sustainable consumption and pursue best practice in environmental management.

The European Association of Communications Agencies (EACA) is working closely with UNEP to create greater understanding of CSR issues by encouraging audiences to recognise and understand the issue of sustainability; developing an agency Code of Ethics, joining the Global Compact, developing and promoting case histories with sustainable features; making CSR/sustainability one platform for EACA's annual European advertising effectiveness awards, creating a communications toolkit for Governments to assist them in addressing social and environmental challenges and publishing a guide to CSR for agencies.

More broadly, there is no shortage of high-level backing for CSR activity. There's the UN's Global Compact, for example, which has engaged leading businesses around the world to pledge improved responsibility. And the European Business Campaign 2005 on CSR (www.csrcampaign.org) aims to mobilise 500,000 business people and stakeholders. Among its milestones is a marathon of major CSR conferences throughout Europe, culminating in a business Olympics in 2004 to raise awareness.

The EU has also become involved. The European Commission issued a 'Communication' in summer 2002 which stressed the voluntary nature of CSR but also its importance in achieving the EU objectives of building a successful and inclusive economy. It rejected the European Parliament's call for mandatory CSR reporting, but has set up a 'Stakeholder Forum' to continue dialogue on the subject.

With all this high-level activity, CSR has become impossible to ignore. Businesses will have to respond, and communications agencies can be there to help.

For further information, please contact:

EACA

European Association of Communications Agencies

info@eaca.be

+32 2 740 07 10

www.eaca.be

^[1] Voice of the People, World Economic Forum, compiled by Gallup & Environics, 2002

^[2] www.uneptie.org/pc/sustain/advertising/advertising.htm