It took only three days for the first corporates to step up to fill the vacuum left by Donald Trump’s exit from the Paris accord. Silicon Valley spoke first, followed by a chorus of CEOs, from Elon Musk to Jeff Immelt, promising to work with cities and citizens to meet their targets. Few would argue they were wrong.
CSR has a PR problem, and it’s not going away
In the post-Brexit Trumpian reality we face, corporates are finding themselves increasingly at the coalface of promoting and even defending society’s interests.
The question which confronts us, is how critical we think they are to doing just that.
Take a random cross section of one hundred Londoners and ask them if companies have a duty to ‘care for the environment’. Only the most ardent free-marketeers would answer no.
Ask them whether it fundamentally changes their perception of that company, and you’re left with a different answer.
So, it would seem, according to data from a new report on Authenticity by PR company FleishmanHillard would argue.
The thesis is simple. There are nine drivers of corporate reputation. A simple nine. This is backed up by longitudinal research from thousands of consumers across the world. At least four of those factors are concerned with corporate social responsibility – care for the environment, community impact, employee care, and being seen to be ‘doing the right thing’.
Coming back to the original point, care for the environment is with only two exceptions ranked in the bottom three priorities for consumers across 20 sectors in the UK economy.
A similar picture can be painted for ‘community impact’. Whilst the long tail of the financial crisis prompted greater scrutiny of the contribution of banks to society, less than 5% of people rank a bank’s community impact as the most significant for their perception.
What’s equally as important is the gap between people’s expectation of a company, and their experience of it. The ‘authenticity gap’.
In spite of ranking it consistently lower than customer care, value and innovation, the gap between what people expect of companies on care for the environment, and their experience is not small.
Some 25% of people rate environmental impact as the most important factor for energy companies – higher than any other considered. Yet less than half (11.8%) feel their expectations are met – leaving a gap of 13.2%.
Car producers disappoint consumer expectation on the environment by a similar margin (11.5%). It is equally as important for the food and beverage sector, where the gap between expectation and reality is higher than 5%.
What is clear is that in a period where the stakeholder expectation of companies is to be purpose driven and socially conscious, the importance consumers attach to this for a company’s reputation is surprisingly low.
So, how to reconcile the disconnect?
If the reputational impact of CSR is on the bottom rung, is its incentive to drive corporate behaviour that brings benefit to society weakened?
Reputation is but one of many factors driving business decisions to change and invest in CSR, alongside risk for and trust in a company. The corollary of not caring for the environment is still arguably negative on reputation.
One working theory is that CSR is not necessarily less important. Rather there are bottlenecks in how it is communicated and perhaps more critically, how expectations are formed and met.
In a country where you’d be hard pressed to find a FTSE 100 company that hasn’t committed to significantly reducing their CO2 footprint, or to powering a chunk of their operations through renewables, it can be said that consumers just expect corporates to be acting this way.
We may just expect our banks, car makers or cereal producers to be tackling climate change. But we might be surprised to learn they’re lending engineers to support young entrepreneurs in London to build new renewable tech which they buy up and build into their supply chain.
The lofty language of targets and grand ambitions is not getting cut-through.
We as consumers would rather hear about the people, rather than the processes, which are making it happen. At least that’s the experience of many communicators in this field.
There are now fewer than 900 days until many companies declare on their 2020 CSR targets. Perhaps that’s enough time to think about the language and the purpose that sit behind the targets for the next decade.
Paul Afshar is Director at FleishmanHillard Fishburn’s Reputation Management practice in London and leads on FleishmanHillard’s Purposeful Business work in EMEA. You can reach him here.
This blog post first appeared on edie.net, the market-leading information resource for sustainability and energy professionals.