2012-07-02

Co.Exist

3 Characteristics Of Responsible Corporate Citizens

The most progressive brands are putting good into their core strategies. They are living their values. But what does it actually mean to be good in today’s market?

To be "good" in the past meant a variety of things. Perhaps a company’s product made people’s lives easier. Or maybe they provided jobs in economically challenging times. But chances are the environmental effects of manufacturing were never considered, and overseas production was a financially intelligent decision free from ethical implications. Big businesses and marketing agencies were focused on selling the American Dream. Problematic environmental and social consequences hadn’t yet come on the radar.

In the 1970s, a new marketing movement was born. It was called "cause marketing" and it matched for-profit businesses with charitable endeavors. Over the next few decades, the measure of doing good was how much your foundation gave to cancer, AIDS, dolphins, or any other topical issue. Cause marketing had its tangible benefits, but would prove to be trendy and lacking actual commitment.

Today there is an increased consumer value in supporting businesses that don’t simply do well, but that do good. Cultural values are shifting, and this sea change is catalyzing corporations to revisit the choices they are making. And this will continue. But we are far from a world where corporations are making choices based upon the triple-bottom line: profits, people, and planet.

Today the concept of corporate "good" is synonymous with corporate social responsibility (CSR). The problem with CSR is that it often ghettoizes good endeavors into a single department. Rather than addressing core environmental or social issues, companies allocate and donate and offset themselves in hopes of winning a favorable public profile. But a nip and a tuck do not address chronic heart conditions. For instance, McDonald’s restaurants do great work through their Ronald McDonald House Charities. But what about the vast amount of non-biodegradable consumer packaging that is thrown in the trash each day? Until companies address their own environmental and social demons, no amount of philanthropic tap-dancing will be enough to distract increasingly more educated consumers.

One-off philanthropic acts for the purpose of improving corporate reputation might provide a brief spike in consumer interest, but translate into little sustained brand respect or actual societal improvement. People are more connected than ever, and we are becoming more critical of the media we consume, and savvier with our dollars. Hoodwinking the consumer doesn’t work anymore.

So if CSR is simply not good enough, and cause marketing is as hip as crimped hair and MC Hammer pants, what does "good" look like?

Here are three characteristics essential for any company that wants to be taken seriously as a responsible corporate citizen:

1: Truth

At some point it became acceptable for corporations to blatantly lie to the consumer. (Remember cigarette ads?) With the interconnectedness of our modern culture and mobile phoned-armed citizens becoming real-time neo-whistleblowers, companies that deviate from the truth are being slammed faster and harder than ever before. The simple solution: Tell the truth. And if the truth is not pretty, tell it anyway. And then tell us what you’re going to do about it.

Example: When it comes to sustainability, U.K.-based juice company Innocent lays it out directly on its website: “We sure aren’t perfect but we’re trying to do the right thing.” It’s a simple yet compelling statement that makes the brand personable and more humane. But it also goes further, sharing comprehensive strategies when it comes to nutrition, ingredients, packaging, production, and long-term legacy.

2: Shared Value

The effectiveness of a company and the health of the social, environmental, and economic ecosystems where it exists are mutually dependent. In simpler terms: Be a respectable neighbor.

Example: Canadian bank Vancity prides itself on making "good money." It states: “When we make an impact on our community, it comes back to our members’ prosperity.” The bank offers socially responsible investment portfolios, but also has a selection of homegrown initiatives, including financial support for local farmers’ markets.

3: Impact

The good companies of 2012 are displaying real compassion and commitment to social and environmental issues. The most effective (and honest) involvement is to address issues that fall within the domain of business.

Example: American company Proof Wood Eyewear is guided by the ethos “Look good, do good.” It makes wooden eyewear, so it is working within its domains (eyesight and wood) by supporting sight-giving surgery in India and reforestation efforts in Haiti.

We know that companies can no longer afford to profit at the expense of the people or the planet. Being good is not a five-year plan, nor is it a sparkly marketing campaign. It certainly shouldn’t be allocated to a corporate subdivision. Being good is systemic; it comes top-down and bottom-up, and permeates from every division and department. It is a lifelong pledge from the brand to the consumer, and to the world.

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7 Comments

  • woody

    I feel this is all true, but the truth is that marketing is changing again. Cause marketing is still in place but slowly and surely the percentage of good given by corporations is shrinking. Now we hear that a portion of profits is going to help this or that. How much are they giving? Only the government knows and when they don't tell you publicly it means they aren't paying as much as a consumer would expect. A good example of this are wood sunglasses companies. They know that they are making these sunglasses out of wood and that they need to assure people that they are not going to ruin forests. Some of these people plants trees, one tree for each pair, well a seed costs a penny, wooo. They aren't doing much good but not many customers look deeply enough to find out. One wood sunglass company I have found that does good for real. Hatcheteyewear.com they give a hefty portion of profit to charitable organizations that effect peoples lives. It is pretty amazing.

  • Woody

    Yes, I love companies like this, but if you are going to do good, do more of it. Not just 1  or 2 percent profit, but a substantial portion. Like Toms. A pair of shoes for a pair of shoes? That is awesome! But 25 cents towards building a school in Africa for a $100 purchase... I am not so sure. Do good for the sake of doing good. Not for the publicity. Besides, I like the wood sunglasses from http://www.HatchetEyewear.com.

  • Daniel Wall

    Hoodwinking the consumer doesn't work anymore? I would just about suggest that publishing that comes pretty close to proving you don't believe it at all.

  • Mark Duran

    Corporations get to throw their money all over the place for various reasons, but mostly it's about marketing and human resources department's public relations. Good for the recipient, but patronage also demands allegiance. When companies use their charity as a marketing ploy, it shows that their donations or pro bono work wasn't really charity in the first place. Case in point, the creepy amount of advertising that Wells Fargo did on its behalf for Gay Pride in SF this year. Their support of the gay community should have been a given not an marketing/hr talking point.

    Ultimately, there are no real gifts, only self-aggrandizement. 

  • Craig Fechter

    Mark - 

    I completely agree with you on this point.  If you publicize it and use it as one of your main mantras, it just ain't real and is really only a way to make more money and/or convince people to spend more money to buy your product.

    I see the shoes they sell at whole foods for 60 bucks per pair and their main thing is for each pair of shoes they sell, they'll give one away to someone needy.  What I say - go to payless shoes source and buy a $20 pair for the same quality shoe for yourself, spend $20 to buy an extra pair, then have an extra $20 to do whatever you want with.  

    I'm way skeptical whenever I see this happen and usually expect that it's an excuse to charge more than they otherwise would or just an advertising talking point.