In 1890s, when the Cholera epidemic hit the European countries like Spain. A man decided to popularize the concept of Cleanliness and Hygiene through a revolutionary product ‘Sunlight Soap’. Today his company has transformed into a global Consumer goods giant appearing on top 50 most innovative companies list. He was none other than Mr. William Hesketh Lever who built the Unilever Empire.
The concept of doubling the business by creating positive social impact and reducing the environment footprint had existed since centuries, Ref. figure 1. Organizations were traditional built up to address the social problems by identifying pain points. Over the period we somewhere digressed from the People aspect to Profit aspect. That’s when in mid-1990s John Elkington had to develop the Triple Bottom Line framework that incorporates the 3 dimensions of performance: Social, Environmental and Financial. Commonly known as the 3Ps of organizational performance: Profit, People and Planet.
Figure 1: Sustainable Business Growth
Over the period companies have faced serious challenges like cash crunch, targets of growing faster than competition. This has resulted in completely ignoring the society and environment. Recently many companies started to report their carbon footprint reduction data, waste management practices and various ways for reducing the energy consumption. Companies started competing with each other setting the industry benchmarks themself. Even after spending millions for environment related activities the companies were mostly left unnoticed by their consumers. Contribution to CSR thus became an activity similar to that of paying taxes. Wherein, the government asked corporates having a net worth of rupees five hundred crore or more, or a turnover of rupees one thousand crore or more or a net profit of rupees five crore or more shall ensure that a minimum of 2% is spent on CSR activities.
Figure 2: What qualifies as a CSR activity [1]
Most of the CSR initiatives (Ref. figure 2) are top-down driven, where the management takes the decisions of where and what to do to utilize the 2% contribution.
Now it’s time to go back to our fundamentals for which the organizations were setup. Thus, following a bottom-up approach and understanding what the society actually needs thus gaining future prospects.
“The flexibility of the Triple Bottom Line (TBL) framework allows organizations to apply the CSR concept in a manner suitable to their specific needs.”
Let us see some areas where organizations can make a significant impact with some recent examples.
Marketing:
Base of marketing is to create a demand for your product. But what if certain geographies are totally unaware of your product, what if your product cannot be used in certain geographies? How will you create a demand there?
Best solution is to provide the missing element: A women on an avg. travels 3.7 miles daily to fetch water for her family, this limits the per capita consumption of water. Indirectly limits the consumption of products which are direct or indirectly related to water. A soap manufacturer should identify such places and do a CSR activity in building underground wells and subsequently educating people towards hygiene.
Let us consider the most recent example in an urban setup. Lifebouy’s ‘Haath, Munh Aur Bum, Bimari Hogi Kum’ campaign, on one hand is spreading the message of total hygiene whereas on the other hand it is making people increase their consumption by suggesting additional usage of the soap.
Public Relations:
According to a study carried out by Cone Communications and research firm Echo, 90% said they would stop buying a product if they learned of a company’s irresponsible business practices; while 92% said they would buy a product with a social or environmental benefit, if given the opportunity.
One such company which was an auto component make – Motherson Sumi’s stock took a hit after the Volkswagen scandal. The auto component maker’s stock tanked 14% in just two days to Rs241.9. This was not just in India, component makers and logistics providers from rest of the world faced the similar situation.
“Potential customers, suppliers, business partners would prefer being associated with an organization which is creating social or environment benefits”
Let’s take an example of the ‘evil empire’, the Oil and Gas industry. By virtue all companies in this sector face an uphill public relations battle. The challenge is how to gain investors’ attention towards them, how to improve community outreach and how to boost recruitments by shoring up your brand perception. Below are some of the CSR activities the companies should follow to achieve the above returns.
- Using digital medium to share your story – Chevron a multinational energy company in US has started a YouTube playlist ‘Meet Our Employees’. The videos describe the viewers about what it takes to do their job. Explaining the wetland restoration projects the company showcases their efforts in safeguarding the wildlife [3].
- Community engagement – To proactively engage with relevant stakeholders, understanding their concerns and responding to their needs is what takes your brand to the next level. This will help foster positive relationship with the people in the project areas where the Company operates.
Branding:
Companies have positioned their brands as a product for social cause. Let’s study positioning of HUL’s hand-wash segment; it says ‘Brands that saves lives’. Below are some of the events that take HUL beyond CSR to create a great behavioral impact amongst its potential users.
Figure 3: Lifebouy’s fight against diarrhea [2]
Figure 4: ‘Jump-Pump’ game for hand washing in schools
Recently at TEDx gateway event in Mumbai, I came across a brand ‘Ecofriendly Jalebi’ which was promoting ecofriendly products with unique product differentiation. The products included plantable pencils, plantable books which were a perfect example of cradle to cradle product development.
Figure 5: Ecofriendly Jalebi products
Organization development:
CSR initiatives will go a long way if we consider Employee Engagement along with Customer focused activities. Implementing CSR in organization policy makes employees recognize your brand and get them talking about you.
In my previous IT Company as part of skill development we use to tie up with the local government and organize certified training camps. Later, these certified local members were absorbed by the company for maintenance, housekeeping and facilities related jobs. This helped the company in significantly reducing the hiring and training cost.
Summary:
Piggybacking through CSR should not be referred as an evil marketer’s idea. Rather this should be looked as an opportunity for win-win for both the society and the organizations. So that organizations do not consider CSR as an equivalent activity to paying taxes and societies get the actual required benefit from the activity.
It is therefore the responsibility of organizations and government to maintain the sanctity of the Triple Bottom Line framework by avoiding it from getting exploited.
References:
[1] KPMG CSR India 2014 Report [2] HUL CSR initiatives- [3] Chevron CSR initiatives Tags: CSR Marketing stealth marketing TripleBottomLineYou might like reading:
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Loved reading it. Most companies essentially look at CSR as part of their marketing budget these days.