Corporate Social Responsibility Tool to create a positive brand image
What will we discuss• What do we mean by CSR• The great debate about CSR• CSR as a business strategy• Tools to use CSR to build trust• Effects of CSR
What is CSR There is no single accepteddefinition of CSR, which cause confusion as what exactly constitutes a CSR activity.
Definition 1“Corporate Social Responsibility is thecontinuing commitment by business to behaveethically and contribute to economicdevelopment while improving the quality of lifeof the workforce and their families as well as ofthe local community and society at large”. World Business Council for Sustainable Development definition
Definition 2“A concept whereby companies integrate socialand environmental concerns in their businessoperations and in their interactions with theirstakeholders on a voluntary basis”. European Union definition
CSR is called different things Social responsibility Corporate Sustainable Citizenship business Corporate Sustainability Corporate Responsibility
Stake holders• Can be divided in two groups – Contractual stakeholders (Employees, suppliers, customers – has a legal relationship with the business) – Community stake holders ( Society and community at large)
Debate on CSR• Not all companies behave in a socially responsible manner• Two schools of thought: – Free market view: The job of business is to create wealth for share holders – CSR view: Business should be concerned with social issues
The case against CSRThe business of business……is business. - Milton FriedmanThe only one responsibility of business towardssociety is maximization of profits to the shareholders within the legal frame work and ethicalcustom of the country. Time, 1970
The case for CSR• In recent years business has been viewed as a major cause of social, environmental and economic problems. Companies are widely perceived to be perceived as prospering at the expense of the broader community……. The legitimacy of business has fallen leading to a diminished trust in business. - Michael Porter Harvard Business Review, 2010
2 questions raisedWhat is What contributionbusiness should it make for to society
But both are interdependent Society needs Business business needs society Employment Create & wages demand Public assets Investment & and innovation infrastructure Profits & Legal taxes protection
How has CSR changed in the last decade2000 2012 CSR is a strategic / CSR is a moral issue. profit issue. Ignoring CSR We want to do the potentially damages right thing. We want shareholder value. to invest in the Embracing it creates community. value.
New role for CSRIn today’s world where business have become global but governments and society have remained local, companies have to bear the social responsibility for their actions.
CSR as a business strategy What % of global CEOs are planning to changestrategies significantly in the next three years asthey expect stakeholders to factor in companies environmental and corporate responsibility practices into purchasing decisions? Source: PwC’s annual global CEO survey 2011
CSR as a business strategy49% • Those that rely on consumers as a primary source of revenue53% • Those that rely on businesses as a primary source of revenue51% • Those that rely on governments as a primary source of revenueSource: PwC’s annual global CEO survey 2011
CSR as a brand aidCSR aids the building of brand equity, especiallywhen there is a consistent commitment to CSRefforts in the long term by an organisation. Oneexample is the company SalesForce.com whodonate 1% of company profits, 1% of employeetime and 1% of equity to other charities.The SalesForce.com policy also attracts acommitted and high achieving team of employees.In order to build this brand equity, consumers needto have faith in the company commitment to CSR
CSR in practice Cause Promotion • Increasing awareness and concern for social causesCause related marketing • Contribution to causes based on sales Corporate social • Behaviour change initiatives marketingCorporate Philanthropy • Donating directly to causesCommunity volunteering • Employees donating time and talent in community Socially responsible • Discretionary practices and investment to support causes business practices Source: Kotler & Lee, CSR, 2005
CSR in practice Cause Promotion • http://www.tesco.com/raceforlife/ • http://wildlife.dawn-Cause related marketing dish.com/en_US/savingwildlife/home.do Corporate social • http://www.drinkiq.com/en-IN/pages/home.aspx marketing • http://www.dell.com/Learn/in/en/incorp1/corp-comm/cr-Corporate Philanthropy giving-philosophy?c=in&l=en&s=corp&delphi:gr=true • http://www.hsbc.co.in/1/2/miscellaneous/about-Community volunteering hsbc/corporate-sustainability/employee-volunteering Socially responsible • http://www.lifebuoy.com/socialmission/global- business practices handwashing-day/ Source: Kotler & Lee, CSR, 2005
Effects of CSR• According to the research carried by Cone Inc., 79% of consumers would switch to a brand associated with a good cause.• According to a study by The Economic Times, donations by listed companies grew 8% y-o-y.• As many as 108 companies donated up to 20% more than the previous year.
World’s most reputable companies WaltBMW SONY Disney Source: http://www.reputationinstitute.com/
World’s most reputable companiesDaimler Apple Google Source: http://www.reputationinstitute.com/
World’s most reputable companiesMicrosoft VolksWagen Canon Source: http://www.reputationinstitute.com/
World’s most reputable companiesLEGO Adidas Colgate Source: http://www.reputationinstitute.com/
World’s most reputable companiesPanasonic Nike Intel Source: http://www.reputationinstitute.com/
World’s top ranked CSR companiesMicrosoft Google Disney Source: http://www.reputationinstitute.com/
World’s top ranked CSR companiesBMW Apple Daimler Source: http://www.reputationinstitute.com/
World’s top ranked CSR companies Volkswagen Sony Colgate LEGO Source: http://www.reputationinstitute.com/
To endIt takes 20 years to build a reputation. And only5 minutes to destroy it. - Warren Buffet Thank you