Corporate and social responsibility (CSR) has been around for a while now. In the wake of the personal and corporate greed that has led to the current parlous state of affairs, many are reflecting on both what capitalism means to them and what role their business has to play in addition to creating shareholder value.
Many CSR programmes to date have been a matter of putting something attractive on the company website or rebranding in an appealing way. Step forward ‘green’ BP with your lovely flower logo.
In his book Who Cares Wins: Why Good Business is Better Business, David Jones (CEO of advertising and communications giant Havas) outlines his theory that there have been three key stages in the development of CSR.
The Age of Image from roughly 1990 to 2000 where businesses represented themselves as greener, nicer, friendlier so that more people would buy from them and yet did nothing to change their behaviour and to live by the values that they projected.
The Age of Advantage lasted from 2000 to 2010 where firms genuinely set about trying to turn this into a form of competitive advantage. Marks and Spencer and their groundbreaking Plan A are a good example of a company that lived up to their sustainable and equitable image with real change not only in their business but throughout their supply chain.
The Age of Damage is one which we have just entered. Consumers are not only savvier than ever, they are better connected than ever before. If consumers smell a rat they have the opportunity to bypass the Office of Fair Trading and head straight to YouTube or Twitter to air their grudges. Never before have businesses been so accountable to their customers.
The cost of being found out (or of not embracing CSR in the first place) is real and applies to businesses’ brands, P&L and share price. But to me the most intriguing cost to businesses comes in human form: research shows that the millennial generation will choose to work for a company whose values they believe in than one that pays them more. If businesses want to attract top talent, they must become a business that exists for more than purely pounds and pence.
Tom McCarthy advises on Mergers & Acquisitions for www.odysseycf.com and is Chairman of the Bristol Institute of Directors www.iod.com
