CSR, and why companies have no choice but to become the good guys

CSR also helps in long-term thinking, as in sustainability initiatives. Customer engagement is another plus. All this leads to improving public image, increasing media coverage, and attracting and retaining investors.

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CSR Cartoon by Konda Raviprasad. Copy Right Cartoon Watch & India CSR
CSR Cartoon by Konda Raviprasad. Copy Right Cartoon Watch & India CSR

By P M Praveen Das

We live in tumultuous times. The pace of change is exponential. People feel the need to hold on to things that are solid and of lasting value.

If we look around us, we can see the slow-food movement gaining ground. Organic is the new watchword in foods. Retro music never really went out of style. Millennials are investing in ‘experiences’ as opposed to investing in real estate or automobiles, and not staying rooted in one place, be it a company or a country. All these speak eloquently of people seeking deeper values and deeper experiences. Today, more and more brands are fulfilling these needs.

One way brands have been leveraging their equity is through corporate social responsibility. In India, we all know that it has been mandated by the government (2% of a company’s earnings are supposed to be spent on CSR). But what is CSR? It is a way for companies to benefit themselves while benefiting society. People have moved on from asking companies,

‘What do you stand for?’ to, ‘What do you stand up for?’

Meanwhile, stakeholders are asking questions like, ‘What’s in it for me?’ Or, ‘Is society benefiting as a whole?’ Or, ‘Are you making profits in an ethical manner, and giving back to the society which is making you profitable?’ If companies can answer these questions, they dispose themselves favourably to their customers.

So, how do companies gain from CSR activity? Well, it helps them innovate.

Take Savlon’s ‘healthy hands chalk sticks’ campaign, where chalk mixed with soap made it easy for children to wash their hands after using chalk on slate. Cost saving is another benefit. For instance, when a company comes up with eco-friendly packaging, or when it installs energy-monitoring devices, as General Mills did to reduce its energy consumption and save expense.

CSR also helps in long-term thinking, as in sustainability initiatives. Customer engagement is another plus. All this leads to improving public image, increasing media coverage, and attracting and retaining investors. And the benefits that accrue from employee engagement are substantial too. People want to work for a company they respect because it builds a positive workspace environment, increases creativity (especially when ideas are crowd-sourced), encourages professional and personal growth, and promotes individual philanthropy.

Consumers believe companies should try to achieve their business goals while improving society and the environment. A recent study from Cone Communications showed 91% respondents said they wanted to hear about a company’s social responsibility. In this scenario, companies would be doing themselves a favour by reaching out to society and earning ‘good credits’. This creates a deeper connection than old-school marketing.

Some vivid examples in this regard are Dove’s ‘Real Beauty’ campaign, and, perhaps, Chipotle taking a stand on factory farming. All these have one thing in common — they take CSR principles and deploy them in ways that are far more efficient than traditional ads. Brands can use these principles to build trust and loyalty among customers.

Truthfulness is the first requirement for any socially responsible advertising. Obviously, it should not promote or contribute to racism, sexism, irresponsible use of alcohol, sexual violence, etc. At its best, CSR combines a company’s charitable activities with its marketing campaigns. It can improve the public perception of the company in more ways than one, by increasing sales and improving employee morale.

CSR is here to stay. People are much more conscious of the environment they live in. Millennials are looking for human-interest stories, not brand communication. They consume real stories that make a difference (and share them with gusto). Companies have no choice but to become the good guys, and smartly communicate their intentions to the public. It’s win-win, and as good as it gets. Until another idea comes along and makes it better.

(The author is MD and Chief Creative Officer, Happy mcgarrybowen)

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