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The emergence of corporate social purpose – better than CSR

BY FRANCOIS VAN DYK

There is a hunger for transparency, trust and a positive change in the world. Hence, corporate social responsibility has become of major importance in business strategy – to make profits but still focus on the social and environmental impacts.

A lot of wisdom is locked up in old fables. Most of us grew up with Aesop’s Fables, a collection of stories credited to Aesop, a slave who eventually became a free man, around 500 BC in Ancient Greece. While arguably his most famous story is The Tortoise and the Hare, where the tortoise eventually wins the race despite being the slowest, Aesop is credited with hundreds of other stories featuring great lessons.

A famous fable tells the story of The slave and the lion. A slave escapes and seeks refuge in a cave. Not realising it was a lion’s lair, once the beast returned the shocked slave expected to be eaten immediately. The lion, in great pain, offered his paw to the slave who noticed a large thorn which he removed. The two became immediate friends. 

On returning to society, the slave was locked up by his master who decided to make an example of him and feed him to beasts. A fierce lion entered the stadium but instead of devouring the slave, the lion came and laid down at the slave’s feet – his old friend! The crowd demanded that both be released immediately! The moral of the story is that good deeds do get rewarded in the long run.

Profit, People, Planet

John Elkington, serial entrepreneur and global expert on corporate responsibility, is credited with creating the term “The Triple Bottom Line”. This encourages a business not just to look at their traditional bottom-line – the financials – but also to evaluate the social and environmental impact of its activities. Also referred to as the three “Ps” (Profit, People, Planet), it dictates that a business’s responsibility lies with all its stakeholders and not just the shareholders.

History is littered with many examples of companies that neglected the impact their business had on people and the environment. Many man-made disasters come to mind such as the Bhopal disaster in India in 1984 where half a million people were exposed to methyl isocyanate gas and other toxic chemicals. More than 2,200 people died due to a poisonous gas leak from a pesticide plant. 

An increasingly polarised world with the likes of Brexit, American trade wars, fake news and misinformation, has created a massive deficit in trust. People do not trust governments, foreigners, companies and each other.

Hunger for transparency

Though brands spend billions on marketing messages, people tend to trust peer recommendations far more than normal advertising. The Nielsen Global Trust in Advertising Report (2015) showed that 83 per cent of respondents rather believed product recommendations by family and friends. 

There is a hunger for transparency, trust and a positive change in the world. Hence, corporate social responsibility has become of major importance in business strategy – to make profits but still focus on the social and environmental impacts. Other research studies by Nielsen (2013) showed that 50 per cent of respondents would pay more for products and services of companies that engaged in positive activities.

Just two years later research by Lab42 showed that 85 per cent of people surveyed indicated that they would pay more for goods if a company was socially responsible. The unfortunate reality is that many companies only invest in Corporate Social Responsibility (CSR) as an add-on and they do not realise the massive benefits it could realise.

Corporate social purpose

Recent times have seen the emergence of corporate social purpose, a concept far wider than traditional CSR.  Many organisations are starting to realise that doing good does play a huge strategic role in their businesses. From positioning itself differently from their competitors, recruitment and retention of talented employees, risk mitigation, innovation and more efficient and sustainable processes, the benefits of creating a very specific social purpose are huge.

Lately, we have seen  examples of brands taking their social purpose very serious. Just days after President Trump signed an order to temporarily close US borders to refugees, AirBnB aired an ad during the Super Bowl in response to his order. The ad, “We Accept”, showed people of many races and groups and said “We believe no matter who you are, where you’re from, who you love or who you worship, we all belong. The world is more beautiful the more you accept.”

Nike’s recent controversial campaign featuring Colin Kaepernick, an NFL player that lost his career due to protesting the US anthem because of police brutality, was a massive risk for the brand. Many were outraged and saw Nike as being anti-American. However, Nike’s message resonated with people who were tired of the current rhetoric and polarisation in US society. Despite a boycott imposed by some and criticism from Trump, the brand saw an immediate surge in sales and the stock reached an all-time high.

This is certainly not to say that brands need to jump on controversial issues for marketing purposes. If the brand is not being truthful consumers will easily see through it. But if a brand stands for something good, to improve the environment and people’s lives, the benefits can be huge – even if it is not immediately evident.

Francois van Dyk, @sbalie, heads up Operations at Ornico, the Brand Intelligence research company. He worked in public relations before entering the world of media research. Email: francoisv@ornicogroup.co.za

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