|
|
 |
Just
a bit of greenwashing?
Most companies
now boast of their commitment to social responsibility. But
is it just politically correct smoke and mirrors? James Featherstone
finds out
You would be hard pressed to find a company more loathed in
some circles than McDonalds. It is, more often than not, regarded
as the definition of exploitative, US-style, hyper-capitalism.
Bad food ripped off from third-world farmers sold by under-paid
burger-flippers to, we now learn, people with fat and MSG-addictions.
Don’t be caught eating a Big Mac outside a WTO meeting.
But cast your eye over this list:
One of the "Most Admired Companies" in Social
Responsibility (2000 - 2003)—Fortune Magazine
Among the Top 100 Corporate Citizens (2001 - 2002)—Business
Ethics Number 5 in Reputation for Corporate Social Responsibility
(2001)—Wall Street Journal Among "Most Respected
Companies" for Social Responsibility (2000)—Financial
Times of London
And those are just the first few on a list of CSR
awards on the McDonald’s web site. The company has won
33 other CSR awards in the last five years. What’s going
on? It’s not all lies, is it?
No, it’s not. In the case of McDonalds, and pretty much
every other big multi-national you can think of, what’s
going on is Corporate Social Responsibility. Sometime in the
mid-1990s companies began ‘taking their responsibility
to society seriously’ by overhauling their working practices,
treating their staffs better and putting the environmental impact
of their operations above mere profit.
Or, depending on your point of view, they began putting a bit
of cash the way of fine-sounding projects and redesigning their
logos so as to give the impression of social and moral rectitude
in order to deflect adverse publicity and tiresome demonstrations
at their AGMs.
McDonalds is certainly not alone. Click on virtually any biggish
company’s web site and there’ll be a page of schtick
about their CSR endeavours. All the oil giants; the insurance
companies; global food producers; the automotive industry; banks
– a company not festooned with awards for its social conscience
looks a little naked nowadays. “It is,” says CSR
researcher Arlo Bray at Cambridge University’s Judge School
of Management, “a bit of a trend.”
It is indeed. But is it anything more than that? Is it, not
to put too fine a point on it, just the latest bit of corporate
bull?
A lot of campaigners are somewhat cynical about companies’
sudden conversion to the sweetness and the light. And often
with good reason. A couple of years back, BP paid a design company
several million pounds for a new logo. It sits outside their
UK petrol stations today, looking as unlike an oil company badge
as possible – a rather pretty green flower, in fact. But
it remains an oil company. Many social activists mutter darkly
that presentation is what CSR is all about.
Equally suspicious is the reaction that sometimes comes from
what you might call the free market faction. Milton Friedman,
grandfather of monetarism, wrote a couple of years ago that
‘the one and only social responsibility of business, is
to increase profits for shareholders’. Last year the institutionally
sober Economist wrote a highly scathing article about CSR pouring
a large bucket of cold water over the trend. “It is not
a welcome fashion,” it sniffed.
In fact, there is a handy phrase that both sides attach to their
suspicions: Greenwashing. Same old dirty capitalism put through
the spin cycle.
But hang on. Is this an accurate portrayal of the motivation
behind CSR? And of the outcome? Cynicism is often the first
refuge of the idiot. Or, more pertinently, of someone who hasn’t
bothered to think through the implications of what he’s
saying.
Let’s take the most serious charge: companies are only
bothered about the bottom line and in protecting their brand.
The first thing to ask is whether that is such a bad thing.
Take an early form of corporate social responsibility, for instance.
In the late C19th many of today’s food brands began to
appear because consumers were fed up of being poisoned by lead
in the anonymous chocolate they bought, sweepings-up in the
tea, arsenic in the ice-cream – that sort of thing. Food
companies introduced recognisable brands not out of the goodness
of their hearts (often the same people happily sold the dud
stuff before) but because there was a profit to be made from
giving the customers a guarantee, in the form of a brand, that
the food they bought was unadulterated.
If we enjoy similar benefits today – cars that don’t
burst into flames, food that doesn’t poison you –
it is because there is always a premium for companies in giving
people what they want. Adam Smith taught 200 years ago that
it is not through the benevolence of the baker that we get our
dinner, but through his self-interest. In other words, in the
case of CSR, does it matter whether an oil company stops running
a dangerous refinery in West Africa because its execs are increasingly
bothered about the company reputation? Why should their intentions
be the focus when it is outcomes we want?
Companies certainly are bothered about their reputation, and
with good reason. It can cost them vast amounts of money if
they lose it, as the twin examples of Nike and McDonalds, both
suffering from low sales due in part to negative perceptions
about their practices, show. Indeed, one leading US CSR consultancy
shapes its main pitch around strictly business considerations.
Employ CSR considerations, it asserts, and get these benefits:
Improve financial performance and access to capital, Enhance
brand image and sales, Attract and retain a quality workforce,
Reduce long term costs, and so on.
Steve Goodman, co-founder of social marketing consultancy Good
Business notes that there has been a general move away from
the random philanthropy that firms have always gone in for.
Companies are now more likely to explicitly link social responsibility
to underlying company performance. “Harnessing CSR in
a way that benefits your business - 'social marketing' - has
significant potential, not so much to boost short-term sales,
but for long-term brand uplift.” And brands, as the example
of the C19th food adulterators shows, are a very valuable commodity
indeed.
But isn’t there still the chance that all CSR amounts
to is smiley logos and warm words? It depends on whether corporate
brochures tell the truth, of course. If an oil company claims
to have closed a dangerous refinery, we must assume they’re
telling the truth – and it would be a difficult thing
to lie about given the tenacity of some activists. Some CSR
campaigners have argued for internationally recognized standards
that companies would be forced to adhere to in their annual
reporting. Such standards would be audited. That isn’t
here yet, but it is on the cards and might well be embraced
by companies given what the painful alternatives can be.
What painful alternatives? Shoe manufacturer Nike has suffered
as much as McDonalds from negative perceptions of its practices.
It has become a tainted brand, and sales have plummeted. In
the 90s, people began to find out what sweat shops were, and
that the trainers they wore had been made in one. But only last
year Nike signed up to a global initiative which allows independent
observers to inspect their factories worldwide. The hardest-nosed
chairman of the board cannot afford to ignore research that
shows that 17% of all consumers regularly refuse to buy products
because of the way they think a company has behaved.
Companies, of course, say that they really have undergone a
Damascene conversion to global virtue, profit impact or not.
And if so, then all the better. Watching out for the effects
of your actions because you think it is right and not because
something else forces you to is a good thing whether you are
an individual or a company. Alan Knight, head of CSR for Kingfisher
in the UK, is adamant that this is what his company does. “Social
responsibility is there to repair something you shouldn't have
been doing in the first place. To use it for brand enhancement
is therefore risky," he says.
Even so, the trend towards corporate social responsibility over
the last half-decade must be a good thing, whatever the motivation
for one reason at least: it shows that consumers are becoming
more concerned for the wider costs of their desires and are
beginning to vote with their wallets. Milton Friedman should
approve. Social activists should approve, too, of companies’
swiftness in responding to this new range of consumer desires.
Capitalism can save the world? Maybe. Mark this: McDonalds has
started selling salads.
|
|
|
|
