Last week I completed my summer program on ‘Strategic Marketing’ at Imperial College Business School, London. One of the main reasons why I had opted for this course was infact, one of its modules on Business Sustainability, and my desire to explore the link between marketing and corporate social responsibility. Needless to say, I found this session, taught by Professor Colin Love, the most interesting, which was in essence a reassurance for me and my belief in the immense potential of having a 360 degree approach towards corporate sustainability in the future.
The primary stakeholder for a company is always the consumer. The rest of the stakeholders’ only care about the profit and the same is also not unfounded, considering profit is also an important component for a company to become and remain sustainable. Consequently, the objective has to be to build a brand awareness which has a value on the balance sheet, satisfying all stakeholders.
In 1994, John Elkington came up with the concept of Triple Bottom Line and advocated that the companies should prepare three different & separate bottom lines including profit account (classical financial reporting), people account (measure of social responsibility) and planet account (measure of environmental responsibility). A company producing a Triple Bottom Line is considered to have taken the account of the full cost involved in doing business. CSR has, further, been defined as a form of corporate self-regulation integrated into a business model with the CSR policy functioning as a built-in, self-regulating mechanism whereby a business monitors and ensures its active compliance with the spirit of law, ethical standards, and international norms.
If a company is known to be green, ethical within a consumer group of 15-40, it’s a positive for the company in terms of brand value and can be termed as a ‘Green Benefit’ to it. As evidence suggests, an increase in sales, brand value and brand recognition will lead to an enhanced share value in the long term. [I was actually surprised at the number of people who confirmed that their purchase decisions were influenced by a company’s ethical behavior.]
Most often CSR gets attributed to marketing under PR, running the danger of being mistaken as just a PR exercise, window dressing or a greenwash. Here the marketing departments in coordination with the CSR teams have a major role to play. A CSR policy should be highlighted and communicated only when some work has already been done under it [For instance, recently the Mahindra Group met its CSR objective of constructing a targeted number of toilets in rural areas and communicated it on digital platforms]. Green-washing will only spoil the environment in which the company operates in, in terms of public relations and media. Thus, it becomes the responsibility of a marketing professional to prevent such damage to the brand by ensuring the communication of only the relevant information.
As evident by the CSR practices and trends, social responsibility has both a social component and a business component. A company practicing Triple Bottom Line also has to make money. There is growing evidence to suggest that ethical practices build sustainable businesses which are corporately responsible and the benefactors include the shareholders, staff, suppliers, the economy, the planet and the society. Corporate Responsibility has been recognized as the necessary cost of doing business which gives a company a distinctive position in the market. The business benefits to a company having a defined corporate-responsibility policy have been found to include- better brand reputation, better decisions for the business in the long term, attractiveness to potential & existing employees, meeting of ethical standards required by the customers, better relations with the regulators and lawmakers and higher revenue as compared to that in the absence of it. The positive commercial reputation garnered, thus, also contributes to the HR reputation of a company and their ability to attract and retain employees. Citizenship responsibilities, a requirement for global companies, further, ensure positive social reputation through environmental stewardship, education, community projects and philanthropic ventures. While these may be difficult to define or measure, they are likely to feed commercial reputation of the company.
It’s no longer surprising that the trend is gradually shifting from corporate social responsibility to business sustainability. Corporations are now in a position to effectively control resources, technology and have global reach at the same time, ultimately controlling the motivation to achieve sustainability. Sustainable Development is, therefore, increasingly indicating a market in which the strong and successful accept their responsibilities, showing vision and leadership.
For managing sustainable business & corporate responsibility, communication of the business case is very important, bringing the topic of CSR communications to the forefront. Along with it, inter-firm initiatives, an understanding of benefits, quantification of tangible evidence, adoption of systems to include initiatives, disclosure, stakeholder involvement and an ever evolving business case/strategy are the key requirements of any successful sustainable business practice. The drivers of CSR, key issues, stakeholders, functions required to support the program, company systems/culture/organisation, HR, matrix management, and budgets and resources also have to be managed for an effective implementation of any CSR program. A way to do it, of course, is by setting up a CSR function as a department, educating and empowering the management to collectively manage the process (esp. the marketing & business communications dept.), and fostering ownership (for instance, by having bonus schemes that reward CSR initiatives pursued by employees). The secret to managing sustainability involves understanding the business case, what to do and how to do it. This has to be supplemented with the preparation of a culture of change, environmental management systems, measures and communication plans. What starts with small steps, mostly internal to the company will lead to huge leaps externally consisting of cleaner production/design, service synergies and industry symbiosis.
Corporate Responsibility is increasingly being given a very high priority nowadays. Some of the global priorities for the next 5 years are posed to include the environment, safer products, retirement benefits, health-care benefits, affordable products, human-rights standards, workplace conditions, job losses from outsourcing, privacy and data security, ethically produced products, investment in developing countries, ethical advertising & marketing, political influence of companies, executive pay and opposition to freer trade among others. Models of corporate sustainability will involve those across logistics, supply chain, operations, technologies, services, HRM, marketing and sales. For instance, to be able to say that everything a company purchases is “sustainably sourced” is a marketing masterstroke. Marketing and sustainability, hence, have to be made the two sides of the same coin with the objective – ‘You can do well by doing good.’
It is time to reinvent the role of business in society and in pursuance of it, reinvent the role of marketing.
Marketing CSR will, thus, be ‘marketing to real people by real people.’