Building your brand with CSR


By Toh Ziling and Roger Loo

Sustainability and corporate social responsibility (CSR) are current buzzwords. From the business point of view, sustainability should be an essential part of the brand. Research shows that there is a relationship between a brand’s ‘meaningfulness’ and its perceived sustainable performance. The more meaningful the brand is, the more sustainable it appears to consumers. Consumers believe that corporations should do good in the marketplace.

Havas Media published in late 2010 that only 33 per cent of brands are considered meaningful to consumers worldwide. In a survey of over 30,000 people spanning four continents and nine markets, Havas Media found that the majority of mainstream consumers would remain indifferent if two- thirds of today’s global brands disappeared in the future.

This progressive awareness and concern about issues related to the products consumers purchase have resulted in a surge in demand to understand where the products are from, how they are manufactured, and if there are external benefits to be gained. The bottom line is that consumers want to feel that their needs matter, and that they are empowered to make a positive difference through their actions.

Should businesses win consumers’ hearts at the cost of profit maximisation interests? The fundamental reason why a business exists is to make money. Profits allow businesses to thrive, innovate, and continue serving their consumers – in terms of meeting needs or solving problems. The relationship between society and business is intricate, with the welfare of one depending on the interests of the other.

To unite the goals of both consumers and corporations – CSR would be the way to go forward. CSR has many definitions due to disagreements on its role for the corporation in society. The traditional approach is the philanthropic model where corporations donate a certain share of profits to charitable causes. The alternative approach would be to focus on operating the core business in a socially responsible manner, with investments in communities for business purposes.

CSR is not a liability to companies, but an asset. There is a misconception that CSR activities use critical resources, thus causing net profits to decrease. CSR actually helps businesses think long term. Businesses first learn to improve the conditions of the company’s workplace, and then in a broader sense the marketplace, and thereafter the environment and community.

Social responsibility, if managed well, should enhance the competitiveness of a business in the marketplace and help maximise the value of wealth creation to society.

At Banyan Tree Resorts, CSR practices are seamlessly integrated into the core business model, strategically and passionately. The brand believes in driving sustainable development, as seen in its first resort in Phuket – an abandoned tin mine site deemed toxic turned into a flourishing tropical garden. That was in 1994.

Since then, Banyan Tree has been actively helping many local communities preserve their culture and has championed various environmental causes.

Their triple bottom line – economy, society, and environment – directs sustainable development by inspiring associates, guests, and partners to consider a long-term view when making business decisions.

Brand owners should understand that CSR is a process subjected to the external environment of the firm and that there is no one-size-fits-all strategy. There are different emphases in different countries, and cultural norms and values will shape the behaviour of businesses.

The diagram by Mallen Baker from aptly depicts the various stakeholders of businesses. The four areas shown depict framework, creating guidelines, relating to different stakeholders, which can be assimilated into businesses. Some simple suggestions on how to implement CSR practices:

Support more local community projects within your supply chain Purchase or procure fair trade products that support workers in developing countries (eg The Body Shop) Champion a cause (eg Ichiban Boshi recently raised funds for Japan Quake & Tsunami Relief. It incorporated this fundraising into their promotions, stating that 10 per cent of sales proceeds between a certain period would be contributed to help victims of this catastrophe)

Practise good corporate governance Support local suppliers as this would lower carbon emissions of transporting from overseas back to home markets
Improve customer service standards (eg Ritz Carlton)

Provide a safer working environment and educational assistance to employees
Improve contractual relations with employees Enhance gender equality in the workplace Have a better work/life balance for employees Provide equal employment opportunities (eg Thai Express Concepts has provided employment for over 150 socially disadvantaged persons, including the disabled, ex-offenders, and youths-at-risk since 2003)

To win the hearts of consumers, brands should look inwards to inspire. Going by the principle that a meaningful business is a sustainable one, this thus achieves the objectives of all for the common good. Inject love and authenticity in the business world today, and the multiplier effect could be tremendous.

(Toh Ziling is a brand strategist & Roger Loo is the director of strategic advisory services at BDO Consultants Pte Ltd)

(The Business Times – 10 May 2010 / the Singapore based newspaper)

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