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Session 6, Vollero, Siano, Palazza & Elving
 

Session 6, Vollero, Siano, Palazza & Elving

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CSR in the oil & energy industry

CSR in the oil & energy industry

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  • As you can see from the title, the present paper is on the contribution of corporate communications (CC) to Corporate Social Responsibility (CSR), adopting an approach based on stakeholder involvement that try to avoid identity washing techniques. Our specific research objectives are the comparison of two companies, one from Italy (Enel) and one from the Netherlands (Eneco) on their CSR communication efforts in order to see whether Italian and Dutch companies use the same strategy. Starting from the literature review on CSR and greenwashing practices, the comparison between the two energy companies is made through the analysis of sustainability publications and communications. Finally, interviews with CSR managers complete the scenario.
  • The recent upsurge of interest in CSR communication is decidedly due to the increasing pressures on the part of specific stakeholders (community, government, NGOs, etc.). In the last decades, CSR actions were perceived as a compensation for problems caused by companies to society and environment. Currently, many Authors, indeed, affirm that for several companies a socially responsible perspective can contribute to achieving and holding onto, competitive advantage. To reach this aim, many Authors concur that CSR communication need to progressively move on engagement strategies focused upon processes of mutual responsibility, information-sharing and open and respectful dialogue. Moreover, that’s important practically or managerially also because a gap between stakeholder perception of a company’s socially irresponsible behaviour and its CSR communication can lead to negative effects. To avoid this trap, in CSR communication, involvement, collaboration and dialogue with stakeholders are all necessary.
  • On the other hand, the problem with many CSR communications is that it is seen as window-dressing/identity washing the image of the organization. The consequences of greenwashing activities of organizations have led to sceptical reactions from stakeholders to any CSR-related activities.
  • Among different industrial sectors, especially energy companies can offer sustainable products to their consumers in the form of ‘green energy’ and thus can suffer the “greenwashing” risk. In order to conduct the research, both primary (interview with CSR managers) and secondary sources (CSR publications and communication materials in the last three years - such as TV commercials, print adv, etc.) were exploited to illustrate the two case studies Enel and Eneco. As you can see, the two companies are quite different for the size, but even if in different ways they distinguished for sustainability. Enel gained several international awards (e.g. European Business Awards’ Ruban d’Honneur) in the CSR category and Eneco for incorporating sustainability in its mission and vision.
  • Both companies seem to be aware of greenwashing risk, for example Enel manager said that “the success of a good CSR communication strategy is affected by the consistency between what the company says and what the company actually does, in order to avoid the effect known as “overpromise”. At the same time, Eneco manager declared that they are facing consumer scepticism on sustainability messages, so that they “cannot and will not exaggerate our communication as our competitors do”. Enel uses a wide range of communication tools for CSR initiatives and its presence on the social media constitutes an attempt to strengthen the dialogue with consumers. As for the communication style, Enel is pursuing a type of communication that tends to associate strong “evocative” elements combined with rational/logical arguments (sustainability as shared background). Eneco uses a different communication strategy, probably more suited to the cultural habits of its public. Sustainability is always the main topic of messages but is declined in different ways depending on individual projects or initiatives promoted. The style is outspoken and friendly, in several commercials, humor is the way to long remember the message conveyed and to avoid “overpromising” effect.
  • As for CSR communication strategies, Enel uses a wide range of communication tools for CSR initiatives and its presence on the social media constitutes an attempt to strengthen the dialogue with consumers. As for the communication style, Enel is pursuing a type of communication that tends to associate strong “evocative” elements combined with rational/logical arguments (sustainability as shared background). Eneco uses a different communication strategy, probably more suited to the cultural habits of its public. Sustainability is always the main topic of messages but is declined in different ways depending on individual projects or initiatives promoted. The style is outspoken and friendly, in several commercials, humor is the way to long remember the message conveyed and to avoid “overpromising” effect. As for future trends in CSR communication, Enel considers necessary to increase the points of contact and collaboration with customers. Probably, Enel realised that the current dialogue-strategy was more symbolic than factual. A main risk in future Enel’s communication of CSR is represented by the support to nuclear energy and the recent Fukushima accident made it more controversial.
  • The findings from Enel and Eneco analysis suggest that two different ways are implemented to avoid greenwashing: Enel focuses on “community relations” and “stakeholder involvement”, while Eneco on “sustainability pervasiveness” and “humourism”. It is likely that these two different approaches depend on different cultural habits and social pressures companies have to face. Enel is constantly seen by environmentalists as in defense of a “rent position” in the production of “conventional” energy, while Eneco is considered to be at the forefront of eco-sustainable solutions. That’s why Enel probably needs to invest more in building trust relationships with its stakeholders, while Eneco has consistently emphasized its difference from competitors, without being too harsh.
  • To sum up, both the two energy companies seem to understand that if greenwashing is found out, it can have negative consequences, such as cynicism among stakeholders, reduced credibility and trust in all corporate communications. The possible countermeasures to identity-washing risk in CSR communication seem to be around three strategies: avoiding typical greenwashing practices, linking all CSR initiatives to the company’s core business (i.e. strategic approach to CSR) - both to leverage firm’s resources and capabilities and benefit society (i.e. strategic approach to CSR) – and striving towards social involvement/better mutual understanding of stakeholder expectations of communication strategy and vice versa. However there are several caveats to the conclusions and interpretations of research findings. One limitation of our study is that very specific types of firms and circumstances were studied. For this reason the paper needs to be followed by further research in order to explore the design and implementation of anti-greenwashing strategies.

Session 6, Vollero, Siano, Palazza & Elving Session 6, Vollero, Siano, Palazza & Elving Presentation Transcript

  • Corporate Communication and CSR; comparing Italian and Dutch energy companies on anti-greenwashing strategies Agostino Vollero Alfonso Siano University of Salerno Maria Palazzo University of Bedfordshire Wim J.L. Elving University of Amsterdam
    • Purpose
    • to analyze the contribution CC offer to CSR through an approach based on stakeholder involvement rather than on cosmetic initiatives
    • Specific research objectives
    • to compare Enel (Italy) and Eneco (the Netherlands) on their CSR communication efforts
    • to see whether Italian and Dutch companies use the same strategy
    • Methodology/approach
    • literature review on CSR and greenwashing practices
    • analysis of sustainability publications and communication materials of the two energy companies
    • interview with CSR managers
    • Authors affirm that for companies a socially responsible perspective can contribute to achieving and holding onto, competitive advantage (Hart, 1995; McWilliams et al., 2002)
    • CSR communication engagement strategies
    • processes of mutual responsibility
    • information-sharing
    • open and respectful dialogue (Waddock, 2001; Morsing & Schultz, 2006)
    • That’s important practically or managerially because:
    • A gap between stakeholder perception of a company’s socially irresponsible behaviour and its CSR communication can lead to negative effects (Brown & Dacin, 1997; Sen & Bhattacharya, 2001; Swaen & Vanhamme , 2003)
    Core concepts
  • On the other hand…. Greenwashing The problem with many CSR communications is that it is seen as window-dressing/identity washing the image of the organization (Elving and van Vuuren, 2010) “ Greenwashing is disinformation disseminated by an organization so as to present an environmentally responsible public image” 10th edition of the Concise Oxford English Dictionary The consequences of greenwashing activities of organizations have led to sceptical reactions from stakeholders to any CSR-related activities
  • Methodology and data collection Both primary (interview with CSR managers) and secondary sources (CSR publications and communication materials in the last three years - such as TV commercials, print adv, etc.) were exploited to illustrate the two case studies. Italy’s largest power company (Europe’s second listed utility by installed capacity) 40 countries over 4 continents 78.000 employees About 46% of the power generated is carbon free Enel published its first Sustainability Report in May 2003 e gained several international awards (e.g. European Business Awards’ Ruban d’Honneur), and has been included in the world’s most important sustainability indexes. One of the top three energy companies in the Netherlands Active also in Belgium, Germany, France and the United Kingdom 7.000 employees 70% of green energy in 2020 Eneco wants to be the most future oriented energy service provider in the North-West European market and works towards a sustainable future with affordable and available energy for everybody.
  • Findings Excerpts from interview with Enel CSR manager “ Our CSR communication is fully integrated, using a wide range of tools: press releases, events, internet, BTL promotion, etc…Our communication strategy is mostly rational/cognitive in order to focus on concrete commitments.” “ [..] the success of a good CSR communication strategy is affected by the consistency between what the company says and what the company actually does, in order to avoid the effect known as “overpromise”.” “ We use CSR in our current advertising campaign. Actually, memory and experience are issues strictly linked to corporate social responsibility, to the development of our Country and its electrification.” Excerpts from interview with Eneco CSR manager “ […] All advertisements and commercials have a sustainability aspect. Of course, we have a campaign about green energy, but that is used to have more customers and is not meant to be societal involved.” “ But we do not reveal that we are also in the game to make money. […] we cannot and will not exaggerate our communication as our competitors do”. “ We do need humor in our commercials, but there always needs to be in line with our business strategy”
  • Main topics Definition of CSR A company’s ability to balance different dimensions (economic, social and environmental) in a virtuous circle, based on a proper reporting and communication. Incorporated in Eneco’s mission and vision (“clean energy for everybody”, “Eneco is the most future-oriented energy supplier”). Strategic business unit (SBU) dedicated to CSR and main implemented projects A dedicated unit (9 persons), under the External Relations Department. All employees involved in gathering data for specific key performance indicators of sustainability (KPIs). Various projects focused on community involvement. No dedicated unit, but all employees involved (CSR and sustainability are integrated in the whole organization). Projects of CSR are focused on sustainability in all its forms. External Communication Fully integrated (using a wide range of communication tools, including social media). Emotional style with concrete arguments. Pervasive (all communications have a sustainability aspect). Outspoken and humourous (friendly) style. Results and evaluation of CSR communication No systematic activity, except for single events. Plan to evaluate communication and results of communication. Pre-tests for commercials. Future trends in CSR communication Increasing dialogue and collaboration with stakeholders. Greater integration of CSR (and CSR communication) in Enel industrial plans. Ambition in the positioning of the organization compared to its competitors ( “ all energy companies sell green energy, but others do not have sustainability in business principles ” ).
  • 1 - Enel focuses on “community relations” and “stakeholder involvement” http://www.youtube.com/watch?v=McWUzWszmxc http://it-it.facebook.com/enelsharing 2 - Eneco on “sustainability pervasiveness” and “humourism” http://www.youtube.com/watch?v=JCev-oJAAWM http://www.youtube.com/watch?v=QAfc-cMN9Ac&feature=relmfu Discussion: t wo different ways of anti-greenwashing
    • Both the two energy companies seem to understand that if greenwashing is found out, it can have negative consequences, such as cynicism among stakeholders, reduced credibility and trust in all corporate communications
    • Countermeasures to identity-washing risk in CSR communication
    • Avoiding typical greenwashing practices
    • Linking all CSR initiatives to the company’s core business (i.e. strategic approach to CSR)
    • Striving towards social involvement/better mutual understanding of stakeholder expectations of communication strategy and vice versa
    Conclusions, implications and future research
  • Thank you for your attention! Any questions/comments?