CSR: Brands can no longer afford to pass the buck

The rise of corporate social responsibility (CSR) has put pressure on brands to respond to accusations of unethical and dishonest practices, such as poor safety standards, pollution and using child labour.

When brands stand accused, a crucial part of crisis management is a quick response. An apology and solutions should be offered if the allegation is true. If it is found to be unwarranted, brands should reach out to campaigning groups for clarification. Staying silent will lead the public to think the worst of the brand.

Greenpeace recently pointed out that international fashion brands such as Gap and adidas were linked to pollution at the Citarum River in Indonesia, through their business relations with PT Gistex. Jonathan Wootliff, senior advisor of Bite Global who previously worked with Greenpeace, says while it is usually third-party manufacturing companies that are directly responsible for the environment problem, the temptation for brands to ‘pass the buck’ should never be taken. 

“It is the internationally-acclaimed brands that are responsible for commissioning the manufacturing and will always be held to account,” he says. “It is considered to be the principal company’s responsibility to ensure that all of its suppliers are respecting the environment and have responsible practices.”

The impact of CSR on brands was fully demonstrated recently when Primark was vilified in the UK following the collapse of a third-party factory in Bangladesh, for being indirectly responsible for inadequate building inspections and aggressive cost negotiations.

“The fact is that the reputation of a brand cannot be wall-papered over or protected by creative CSR initiatives,” Wootliff says, adding that the work must include core operations, supply chain, distribution and manufacturing.

After the incident, Walt Disney announced that production of its merchandise would be moved out of “highest-risk countries” like Bangladesh, to strengthen safe-ty standards in its supply chain.

Tara Hirebet, head of Asia-Pacific at Trendwatching.com, says: “Being transparent will gain the respect of consumers, and is a second chance to re-instil brand confidence when it’s lost.” 

Consumers are increasingly embracing brands that contribute positively to society and have built CSR into their products and services.

Sustainability has long been a priority for consumer care company Philips. Support from management and effective partnerships are important when it comes to implementing CSR programmes, says regional head of integrated marketing and communications AJ Hesselink. 

“We do not view CSR as simply ‘a good thing to do’, but rather a different way of expressing how we do business,” he says. “CSR allows us to engage with stakeholders outside of the traditional business arena and gain a better perspective on the needs of our customers.”

Sara Tang, director of strategy at The Brand Union, notes that the majority of fashion brands, particularly those in the luxury sector, are lagging behind in the CSR space. She cites Stella McCartney, widely known for its support for animal rights, as an example of a strategy that is inconsistently applied. “The brand’s parent company, Gucci, sanctions the use of fur in many of its other fashion brands, and does not have an environmental policy in place.”

AGENCY COMMENT Luxury brands under scrutiny Marina Leung, branding and issues management consultant, M. Leung & Associates Luxury brands are often criticised for being elitist and for exploiting rare resources. They are criticised not so much for their environmental impact, but for their considerable symbolic power signifying inequality and excess to the privileged few. (Mind you, the Latin root of luxury, luxus means excess.) Inherent tension exists between this ‘excess’ and sustainable development (SD) supporters, who champion self-restraint for the good of future generations. For luxury brands especially, incorporating CSR into their business strategy and focusing on SD is not a ‘nice to have’, but a very real business imperative. Luxury brands can command premium prices because of their quality and brand equity. Any reports of, or even rumours of, poor sweatshop working conditions, environmental degradation, blood/conflict diamonds will cast a shadow over an otherwise lustrous pricy product. Irresponsible enterprises not only receive criticism in the media and consumer boycotts, but at times even legal sanctions. Likewise, celebrities who are opinion leaders know they need to act responsibly by demonstrating ethical concerns and support for worthy causes. LVMH’s ad campaign features Andre Agassi, Keith Richards, and Buzz Aldrin, all of whom have donated at least part of their modelling fees to Al Gore’s Climate Project.

 

EXPERT COMMENT Not a marketing programme Paul Miles, general manager, Nissan Global Brands need to have vision and commitment to implement CSR programmes. Of course funding is necessary, but continuity is important to make any CSR programme effective in the long term. During uncertain economic times, it may be challenging. But with vision and commitment, these can be overcome in the long term. After all, CSR is not a marketing programme. CSR is a way of building trust in a company. Apart from the obvious corporate goal of growth with sustainable profits, it allows companies to define what other priorities are. The more supporters there are for these priorities, the deeper the trust people have in the company. Be it economic contribution, philanthropy, diversity, corporate governance, safety or the environment, if you listen carefully to your stakeholders and work with them, you can see what activities to pursue to meet your audiences’ needs.