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Conference on Corporate Communications 2009
CR and sustainability: Commit
or Crunch?
Sandra Macleod, Group CEO
Echo Research
June 2009
Outline
• About Echo
• Echo early CR studies
• Fast forward to 2008
• With the recession in full flow ...
• Now 2009 ...
“The
soul never thinks
without a picture”
Aristotle
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About Echo Research
Echo Research is the premier global specialist in reputation analysis and stakeholder
research. We enable our clients to measure how they are viewed, accurately and
impartially, and to protect their brands and reputation
200 staff and
analysts
Offices in London, Paris, New
York, Singapore
Members of
UN Global Compact
All Echo research complies with the MRS Code of Conduct and ISO 9000:2001
In both 2007 and 2008, we won the Gold Award for Integrated Research at the AMEC
(Association for Measurement and Evaluation of Communications) Awards
Echo leads on communication and reputation research for:
Strategic Value
The Organisation
Activities
Output
values, objectives,
strategies
messages sent by
company
messages received
by audience
media analysis
market research
The audience
values &
expectations
Outcome
Audience choices / behaviours
3rd party endorsement
Recruitment / retention
Brand Equity/Brand Share
Regulation
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motivational
research
Outtake / Impact
audience perceptions
client research
Echo’s early CR Studies: Scope
• Eight developed and emerging economies: Australia, China,
Japan, France, Germany, South Africa, UK, US
• 5,432 articles over 4 years in national dailies, business
magazines, internet
• 240 interviews with the financial community, ‘umbrella’
organisations, CEOs , senior corporate CSR decision-makers,
in-house PR practitioners, global agency heads.
• and 40 decision makers in the financial community
…and our most recent in that series
Echo Research
CSR and the Financial
Community: Friends or
Foes?
which asked questions of
the crucial ‘Put Your Money
Where Your Mouth Is’
group:
Does CR really make a
difference to your
investment decisions?
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We spoke in qualitative, depth interviews to:
• FTSE
• Core Ratings
• Confederation of
British Industry
• Britannic Asset
Management
• Capital Investment
• Allianz Asset
Management
• Deutsche Securities
• Australian Investment
Managers Association
• Cazenove
• HSBC
• Deloitte & Touche
• and others
We analysed the financial pages in depth….
•
UK: eFinancialNews, Financial Times, Reuters, The Daily Telegraph, The
Guardian, The Independent, The Observer, The Sunday Times, The
Times, Wall Street Journal Europe.
•
US: Boston Globe, CCN Newswire, Chicago Tribune, Dow Jones
Business News, Forbes, Harvard Business Review, Los Angeles Times,
New York Times, US Newswire, Wall Street Journal, Washington Post,
Washington Times.
•
France: La Tribune, La Vie Financiere, Le Figaro Economie, Le
Monde, L’Enterprise, Les Echos
•
Germany: Borsen-Zeitung, Der Spiegel, Financial Times Deutschland,
Finanzwirtschaft, Frankfurter Allgemeine Zeitung, Suddeutsche Zeitung
•
Australia: Australian, Australian Financial Review, Business Review
Weekly, Sydney Morning Post
•
South Africa: Business Day, Business Report, Financial Mail
Global volume of coverage on CSR
August 2004 - July 2008
Total Number of articles analysed: 52,150
2000
Number of articles
1500
1000
500
0
inspiration
August 2004 - July 2008
interpretation
internalisation
integration
…we measured CR as it went mainstream…..
“…The environment, diversity, human rights,
the community – these used to be soft
issues. Now they are hard issues: hard to
ignore, hard to manage and hard for
businesses that get it wrong”
- David Grayson, quoted by Yvonne Fonteyn, bdfm.co.za
from
soft
……….
.……....
............
to
hard
But how convincing was the link between CR and
performance ?
• Division of opinion - interesting given strong beliefs
about benefits of CSR
• Enron scandal (‘good CSR but look at them’)
offered a convenient bolt hole for doubters
• ‘We need
more
positive
evidence’
Some remained sceptics…
‘Is CSR going to affect my investment analysis ?
No, because my investment analysis is on numbers
and I can’t put numbers to CSR’
So how to make CSR come alive for investors and
analysts ?
• Primarily greater shareholder pressure
• Better methodologies to measure impact
• Clearer definition of CR - codification of what is
expected
• More case studies / developed ‘case law’
So how to make CSR come alive for investors and
analysts ?
• Focus on key issues for the company - and be open
and transparent about reporting
• Feature honest stakeholder reactions and progress
against targets (this is a journey – not a destination)
• Don’t put CR in a discrete box
• Use the language of the financial community
For many others though, CR was edging its way
into investment decisions
• Growing numbers of professionals assessing nonfinancial risk
• CR becoming better understood (the Aha factor – ‘we
can do well by doing good’)
• Institutions starting to say: ‘This is not just for today but
for tomorrow and further ahead’.
‘If companies are exhibiting best practice in their
social and environmental issue of risks then that is
evidence of good strong management, and they tend
to run good companies which return well over the
longer term’
William Oulton, Deputy Chief Executive, FTSE
SO FAST FORWARD TO
2008….
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The Media as Agenda Setter: 2004 - 09
Economic Downturn
Climate Change
Sustainability/CSR
Base: Echo Sonar articles from global online sources
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Sustainability on social networks: Facebook
world’s largest social networking site
with 132M unique visitors (Jun 08) and
500+ member groups on sustainability,
up to 2750 members each.
• Ecofashion
• “Only wear
sustainable
cotton ”
• Universities (St Andrews)
• Countries (Bermuda,
Egypt)
• Transportation
• Sustainable religion
• Sustainable shopping
• Green buildings
• Ecodesign
• Biotecture
• Aerogenerators
• Renewables / Alternative
Fuels
• Media / exhibitions / music /
festivals / tourism
• A sustainable Christmas
• Green venture
capitalism
• Technology &
Innovation
• “Companies that truly
create good”
n=100 largest groups, Oct 2008
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• Organic / local produce
• “Take a bowl to restaurants, like a
wandering monk”
• “Avoid 30 threatened species of seafood
and fish”
• Lactovovegetarianism vs carnivorism”
• “Do 1 good
eco-deed a day”
• “Wear your XO
with pride”
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• “Legalise Hemp”
• Fertiliser-free flowers
• Hydroponic greenhouses for 3rd world
Echo Facebook poll
Given the world financial crisis, what is the most important thing companies should do?
*Answer breakdown by age
Base: 100 Respondents, Facebook.com
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Echo opinion leader survey :
What sustainability means to you?
67.3%
%
Echo’s Opinion Leaders: US/UK Heads of Communications, CSR,
Sustainability, Senior Management, Advisors and Influencers
Base: 167 Respondents
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Contributions to the cause of sustainability
5: A Very Significant Contribution
Base: 167 Respondents
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1: No Contribution At All
For most businesses, sustainability is...
Base: 167 Respondents
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The global credit crunch will...
Base: 167 Respondents
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(Percentages do not sum to 100% due to rounding)
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What does sustainability mean to YOU?
Definitions:
“Bringing people,
planet, and profit
into balance in a
humane, cultured
manner”
Source: Linked-In, leading business-oriented social networking site; 24M+ registered
users in 150 industries n=20
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What is an Unsustainable company?
“Any company
lacking in
innovation.”
“Any company that
cannot differentiate
itself from the
competition.”
“Those that don't value
people as assets, that don't
understand the effect of
their organisation on the
environment and
community, and that don't
practice conservative
financial management.”
Source: Linked-In, n=20
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What sustainability IS, at best….
“Sustainability means
planning for your
business to be in
business forever. It’s the
big picture: conserving,
protecting.”
“Sustainability means
having measurement
systems, both in terms
of growth and decay,
and to manage risk.”
Source: Linked-In, n=20
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NOW THE RECESSION IS IN FULL
FLOW, WHERE ARE WE….?
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Can CR be justified, they ask?
“Recession will put a
stop to CR / CSR…..
Companies will
concentrate on saving
themselves rather than
the planet”
“Social concerns are
being crunched off the
agenda” – The Observer
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Signs of the times…. even in recession
Mars’ total cocoa supply to be
“sustainably produced”
by 2020 working with
Rainforest Alliance
All cocoa in Dairy Milk
product to be certified by
FairTrade
tells supplier conference of 1000 Chinese
companies: “We will hold you to strict environmental and
social standards – despite the recession”
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Does all this herald a new era?
….. a growing societal and business mindset.
Consumers have become outraged by greed and
its consequences for the economy. They feel a
greater longing than ever for institutions that care.
Emerging at the same time is an online-fuelled
culture of individuals who can share, give,
engage, create and collaborate in large numbers.
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Ways of joining Generation G…
C O - D O N A T E Google’s Project 10100, for public to submit
ideas that help other people, voted on by public
E C O - G E N E R O S I T Y Novacem UK offsets carbon output, and
produces cement that absorbs CO2
F R E E L O V E giving stuff away: FreeGreen offers free,
downloadable green house plans
B R A N D B U T L E R S time-saving free services: IKEA’s cycle
trailers at stores to carry furniture
P E R K O N O M I C S free perks: Lexus sponsored a rock tour,
offered free parking and VIP passes to any audience member
arriving in a Lexus.
T R Y V E R T I S I N G try before you buy: Pomme Bébé sells
baby snacks and lets discerning babies try first….
http://trendwatching.com/trends/generationg/
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… and some new perceptions of value and
challenges
• “We find ecology and economy are linked” – Seiko Epson
• “The principles are part of a smart strategy to reduce risk” –
Musgrave
• “We seek to embed responsibility in all our activities regardless of
how tough the competition gets” - Danisco
• “Other [same sector] manufacturers do not observe the minimum
wage. This makes it difficult for us. But we hope for a stable
workforce” – Pentland
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…and what the future holds….
• Admissions of problems to be resolved give greater
credibility to successes
• Better data collection – “we need a clearer picture of safety
performance at our sites” (Diageo); “we have found weaknesses in
reporting on environmental assets and liabilities” (Suez – France)
• Greater workforce diversity – “50% of US citizens of 21+ are of
Latin, African, Asian descent”.
• More ‘lessons to be learnt’ from failures: “We had injured
employees talking to their colleagues about the circumstances of
their accident and that is much more powerful than having
managers telling you how to do things differently” – Nestle
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Future challenges
• Applying prevention rather than cure to corporate issues –
“We built a hospital for respiratory diseases near our oil
refinery……………….”
• Identifying and declaring so others can learn: “The child labour
issue is sometimes based on falsified documentation” (Nike – who
are very frank about success and failure)
• Revisiting the past and aiming for restoration / closure: “VW
exploited 20,000 forced labourers and concentration camp
prisoners.…our employees pressed for a memorial with names
inside the factory” (Volkswagen)
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…NOW 2009, THE FINANCIAL FOCUS WE
RESEARCHED 5 YEARS AGO IS ON
PEOPLE’S MINDS - IN ANOTHER GUISE
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Our questions for 50+ CEOs and COOs
FUTURE PROOFING SUCCESS:
• Life after recession: do you anticipate a 'new paradigm‘ Yes /
No. If yes: harder? softer? greener? more humanitarian?
• How is your organisation reshaping itself and getting ready to meet
the new challenges ahead?
• What are the toughest sustainable development challenges for A.
Your business sector as a whole? B. Your business specifically?
• How important are : Human security & well being / Economic prosperity
/ Environmental adaptability
• Who do you turn to for guidance / advice?
Stay tuned for results (Oct 09)
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Questions?
Observations?
Thank you.
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