Are Consumers Really Buying More Ethical Products?

It’s easy for a CSR professional and full-time ethical consumer (isn’t that an oxymoron?)  to get excited when a another credible study unleashes tantalising phrases including:

‘Purpose is the 5th ‘P’ of marketing‘ and

‘86% of global consumers believes that business needs to place at least equal weight on society’s interests as on business interests‘.

I want more than anything for Edelman’s 2010 Good Purpose Study to be genuinely representative of mainstream consumers but my gut feeling is that it probably falls on the optimistic side of the fence.

Ok, over 7000 consumers in 13 countries is a decent sample size, better than those of the 100 or so sized sample groups accompanying UK cosmetics TV commercial claims anyway, but I’d love to know more about the methodology before getting carried away quite yet. There has been a steady stream of similar information on consumer expectation and spending behaviour including this interesting recent report from Co-operative Financial Services and in other similarly themed reports, all despite the economic crisis harbingers of ethical doom.

Where Did The Summer Go?

Since a blog post is well overdue, with indicative distractions from posting to follow, I thought it time to scramble an attempted summary of events of recent weeks.

My day job using Coethica to encourage CSR in the world of  smaller businesses often introduces me to incredibly passionate, innovative and challenging business ideas and entrepreneurs. The past couple of months have been especially fun.

Two new clients in particular ticked all the above boxes and at the same time threw me deep into the wonderfully perverse world of financial services.

Distraction number one (of no particular order): Ethecol

What can I say, apart from Peter King? I’ll tell you more about Ethecol at a later date but suffice to say a truly great concept for a social enterprise born out of a typically uninspiring financial services offering.

CSR for Smaller Business – Getting Organised

A few months back I decided to summarise Coethica’sexperiences of supporting smaller business using CSR to help their bottom line.

The idea at the start was to demonstrate how you can quickly and inexpensively add value to your business by using concepts found within the CSR agenda.

The suggestions have been practical, easy to understand and requiring minimum financial and time investment. I’d like to bring it all together to begin to look at a more strategic approach and widen your business radar. This is where the real value of being an ethical and responsible business lies.

Initiatives are great but by understanding the bigger picture a little more you can start to embed a more efficient and profitable ethos across your company, your supply chain and to your customers.

The previous posts focused on:

• 10 Top CSR Tips
• Environment
• Suppliers
• Community Engagement
• Employees
• Communication

 

To take your own CSR journey to the next stage you need to begin to properly coordinate your efforts:

Step 1

Create an internal working group of enthusiastic and talented people. Ideally you would include combinations of the following formal responsibilities dependant on your organisation; A senior manager (Chief Executive or Managing Director), financial, health & safety, human resources, and marketing.

In addition to these formal roles you would benefit with people with the following skills, experience or passions: Environment, charities / non-profits, people (company gossip can be a good choice – but be careful!), AND somebody from the coal face of your company i.e receptionist, warehouse, sales floor, call centre, etc (great opportunity to identify and nurture talent).

Even if your group only has two or three of these don’t worry it’s a start.

 

Step 2

Ensure the company has a realistic value / mission statement. If not, create one.

This is important as you need to be able to demonstrate your motives. It will also help you formulate your plan. It can be as simple as a list of keywords or short sentences important to the business, even the over used ones like honesty, integrity, people focused, transparency, eco-friendly, accessible, good neighbours. Pick those that are genuine and applicable both internally and externally.

 

Step 3

Get the group to list all potential commercial risks and opportunities (maybe already available) and then look again through environmental and social eyes to explore any missed or undervalued issues.

 

Step 4

Prioritise stakeholders, issues and appropriate training for your employees.

 

Step 5

What would you call success in 6 months? Set basic targets, i.e. measure energy saved / used, record volunteer hours, log media coverage, cost reductions, customer satisfaction, employee satisfaction, productivity, accreditation etc. Choose data that is relevant and appropriate to your plan and your business.

 

Step 6

Get on with it for 6 months (maybe a bi-monthly working group meeting to start with?) Keep basic records that you will find useful to measure your return on invested time and finance but don’t get hung up on too much detail for now. Just do it.

 

Step 7

Evaluate what worked and what wasn’t as successful, review and start again from Step 2.

 

Step 8

Enjoy benefits and communicate all the way along!

 

As you become more organised and attempt to better manage your environmental and social impacts you’ll need to look at additional investment of time and money. Like any other commercial decision always use a return in investment approach, BUT try to use longer term planning periods and consider the bigger picture. It really isn’t all about the money.

 

If you’ve enjoyed these posts please click the RSS button on the top of  right menu bar.

I’d also love to hear from those that have used these suggestions and the benefits you’ve seen. Either leave a comment on here or send me an email direct to david.connor@coethica.com

CSR is Powerful Stuff

Responsible Business Summit – Day 2

Who?

My first session from the three available at each time was titled ‘Convince the board to increase investment in corporate responsibility’. Like most, and it was the best attended of the three on offer, practitioners and advocates are always looking for any insight into selling the business case for CSR and this appeared to be a good place to start the day. ING Group’s Manager of Business Ethics, Arnaud Cohen-Stuart delivered an good example of dealing with an investment package (connected to a company that produced landmines) that had ceased to fit ethically with the Group’s position and how this process was managed. Not exactly sticking to the question but worth listening to none the less. Acciona – nope, quite a few in the room hadn’t heard of them either - gave an overview of  their ’cheese for CSR’ as they matured (couldn’t resist it) from a traditional construction company to a producer of renewable energy. The presenter, Juan Ramon Silva from Acciona had one of those titles that scares the hell out of me, as Head of CSR and Marketing. Poor Andrew Marshall-Roberts (do you need a double barrelled surname to get on stage today?) from Standard Life had become separated from his slides and recovered remarkably well from his mind map and actually delivered what the brochure had initially suggested. In particular he focused on the need to understand the invidual people that make up your board and the personal drivers that inform their decisions. How often we forget that those inhabitants of  the ivory towered bastions of capitalism actually have real lives and emotions too, it’s just hard getting past their moats.

The lack of a double barrelled surname obviously spurred moderator Jo Confino of The Guardian into enthusiastically taking the panel to task, and refreshingly steered the Q&A into a challenging debate around the role of a CSR Exec. Poor Arnaud was on the ropes for a short time following a question from Gerd Hofielen of Apropo-Global. Gerd asked why there appeared to be a disconnection between the CSR activity within ING and the very publicly visible mistakes made by the  financial side of the business. It briefly raised the point around how far should / can CSR Execs push the businesses that pay them? Arnaud had probably earlier lit the fuse for this thread with his statement that “CSR is not an internal NGO”.

It was at this point in the Summit’s proceedings that Mark Line from Two Tomorrows (as also did Simon Propper from Context Group later on)  inquired about the apparent difference from the topics advertised in the conference brochure and the content of the presentations (or should I say almost pure adverts in a couple of cases) given. The general nodding seemed to reinforce the unspoken agreement from the rest of the audience.

Session 2 was one of a number around the topic of supply chain management. This was always going to be a more gentle 60 minutes than the first but it delivered a truly motivating demonstration of the new exciting strategic partnership between Starbucks and Fairtrade. With senior executives from both organisations displaying such unity it was heartening to see figures stating that 100% of UK & Ireland espresso will be Fairtrade by the end of 2009 and a commitment to double Fairtrade purchases in the same time frame. A representative from Nestle appeared to enjoy pointing out just how small Starbucks’ percentage of the total coffee market was in a valid question relating to guaranteed market prices to producers but couldn’t take the shine from what was an excellent demonstration of robust values and partnership.

“Embedding Corporate Responsibility in your company: your guide to making money from your ethical strategy.” was next with Novo Nordisk predictably impressing all, KPMG advocating a more integrated approach in a very KPMG way but the star of this show was Virgin Media. As relative newcomers to the formal CSR strategic world their approach definitely followed their company ethos. Bold, direct, innovative and a touch of anti-CSR establishment describes Stuart Poore’s presentation of their ‘CR Manifesto’. The other presentations were excellent but Virgin’s was exciting and definitely had an edge by focusing on very direct organisational issues it was clear that they wanted to steer their CSR journey in their own boat, which I, for one, found refreshing. I’m sure the contemporary and energetic graphics played their role and why not play to their strengths? The thought of Virgin bringing their marketing arsenal to bear to promote an evolved version of CSR in a similar vein to their current ’Powerful Stuff’ marketing campaign could inject new impetus into an often staid strategic agenda.

The graveyard shift at the end of my Day 2 fell to Timberland and Caterpillar on yet another supply chain topic. The title was aimed to stir debate but failed. “More scandals in 2009 if budgets are slashed?” never really ignited the proceedings as the discussion around cutting CSR related budgets had been covered comprehensively throughout the Summit. The majority of those presenting were definitely saying that budgets were not being cut disproportionately to other cost centres, with some saying they had seen no change in available resources regardless of economic climate. A final gasp question nearly fanned the flames when the presenters were asked about how they would select which suppliers would lose work as global demand drops, but like so many times before the answer was the same, we’ll stick to our ethical / environmental / sustainability policies as values don’t change. Some suppliers will inevitably suffer. Best price is always key just not always the decision maker.

Overall it was a great Summit. Like always there were great figures from the CSR and Sustainability world, with inspiring and educational speeches and displays. The audience numbers may have been a little down on last year but the agenda has evolved and will continue to do so with an albeit slow but inevitable determination.

Next year post-Copenhagen should be worth the ticket alone.

Click here for the summary to Day 1 of the Responsible Business Summit 2009.

10 Top CSR Tips for Smaller Businesses

This is the first article in a series that will demonstrate how you can make your business better without any preaching about saving the planet or becoming a charitable saint, but please try your best if that is important to you.

One definition of Corporate Social Responsibility is:

“To balance economic, environmental and social impacts whilst maximising commercial benefits.”

It is entirely up to you where your balance point is. The key thing to remember is by considering all three aspects it can make your business more profitable and better for those who work there, your suppliers, your customers, your community and the environment.

Think of CSR as an ethos that helps you make decisions rather than a range of do-gooder initiatives and you’ve already learnt a valuable lesson.

I’ve spent years talking to smaller companies and trying to understand what will make a difference to them. Their answer is nearly always ‘What’s in it for me?’ My answer is more profit, greater longevity, integrity and a smile.

  
Here is a list of quick wins you can do today, at little or no cost that can have a tangible impact:

 

1. Take the ‘C’ word out of CSR!

The phrase Corporate Social Responsibility has been around for a while now and often confused with other terms such as sustainability, corporate citizenship, responsible business conduct, ethical business, environment, philanthropy, charitable etc. They all mean slightly different things but getting hung up on terminology is missing the point at this stage.

It is just good business practice that focuses on areas that, especially for smaller businesses, are not at the centre of your business radar. Think of this as the start of a process that will open up your vision to risks and opportunities that you can begin to manage more efficiently and gain an advantage over your competitors.

These tips apply to all small and medium sized businesses regardless of your product or service.

 

2. Don’t get caught up in a price war

Competing solely on price is a dangerous game and not to be played by the faint hearted. You should be aiming to win and retain custom by delivering a perception of added value. If you charge the same price your competitor why would they buy from you? Even the smallest companies have a brand. What is yours saying?

 

3. Check those energy bills

Many company’s bills are paid by the finance department without regularly checking the meter. I know of one company that was owed over £30,000 because the meter was being read using the wrong units! It pays to read it yourself, check your tariff and check your bills.

A green tariff would be better and they’re getting much more price competitive.

We all know about energy being used whilst equipment is in standby mode. Even if something doesn’t have a little red light and a formal standby mode it could still be using energy whilst plugged in.

In the UK recent figures suggested that on average businesses waste 20% of their energy. What’s 20% of your energy bill?

 

4. Use recycled paper

What’s in it for me? – Recycled paper today can be as good as your normal paper and at a similar price. Ok, but what’s in it for me? – You can do it without any effort, your staff will appreciate it (even if they say they’re sceptical) and any visitors will notice if they see the packets as they walk around the office. The question should really be ‘Why not do it?’

This rule is more about the thought process and you can apply it to anything you purchase. Is there a recycled option at a comparable price? Just ask.

 

5. Charities and Good Causes

Get a charity to work for you! This isn’t as mercenary as it may sound.

We are encouraging mutual benefit through a little relationship building. Do you have spare resources i.e. staff downtime, waste materials or media access you could trade in return for access to contacts or free PR? Support good causes but don’t just hand over a cheque.

Just about every business I know gives resources away each year with 90% reacting to random requests. I’m definitely not saying don’t give money to charities, just be smart and have a plan.

 

5. Flexible working

This isn’t just about letting people work from home it is about accommodating employees whenever practical to the business. Being flexible with hours, i.e. staggering starting and finish times to avoid rush hour / child minding, allowing people to work their 35 or so hours over four or six days, job sharing, etc. It’s the flexibility that both you and your staff will benefit from.

Remote working from home is a great idea where appropriate. The biggest obstacle is management overcoming the fear of not being able to look over employees shoulders to check on them. If you can’t trust your employees it doesn’t really matter where they are. It may need a change in management style but if an employee has a certain number of defined and measureable objectives to achieve it is a no brainer. In many cases productivity is seen to rise by 20 – 30% on top of energy savings (travel to work included), reduction in space requirements. You biggest problem may be stopping your staff work too much!

 
6. Engage with your staff

Communication with your employees has never been more important. Make them feel like they are part of the longer term solution not the shorter term problem. Newsletters, accessible management staff and transparency often reap unexpected rewards and stimulate innovation.

 

7. Get training

We will emerge someday on the horizon from the current economic position. Will your staff be ready to compete at the highest level? Now is a great time to access funding and improve your employee’s qualifications whilst improving retention and productivity rates.

 

8. Government money

Are you fully exploiting your excellent to approach to being responsible by winning public sector contracts? Best price is not always the deciding factor in this competition. Governments are really pushing low carbon economies through their own spending power. Has your company got an environmental or community competitive edge?

 

9. Redundancies

If you do need to make redundancies make sure you fully understand proper procedure. As well as ensuring compliance can you look to help those being made redundant with their next career step? Working in partnership with appropriate external agencies maybe all that it takes.

 

10. Silver linings

With every recession come new opportunities to do business. There is a substantial ‘green’ agenda to just about every country’s economic stimulus packages. How can your business make the most of these?

 

Well, that’s the start of the journey. You might think ‘that’s just good management’ and you’d be right. The first lesson in CSR is its just good business practice.

 

 

 

 

 

 

 

Please recycle any additional CSR tips for smaller businesses in the comment box for others to share!

 

See you next week.

Ethical fatigue

One of the most rewarding aspects of working in the world of CSR is the constant debate and discussion around terms such as ethical, responsible, social, environmentally friendly and Fairtrade etc, especially when talking to the mostly unaware business world. In reality every organisation has their own interpretation of CSR or Sustainability and stage of maturity, usually picking and choosing which elements are most beneficial to that business at that moment.

One particular area that always stimulates my own brain cogs is the retail sector.

A couple of questions to begin to paint a picture… Is Marks & Spencer’s ‘Plan A’ campaign good or bad? Is Tesco the devil disguised as a shop? Is there really such a thing ethical consumerism?

I’m waiting for the first news item about somebody having a mental breakdown due to ‘ethical fatigue’. As we all become more aware of each products life cycle from raw material to its disposal we all have to decide what particular issues are important to us. I wonder what the most ethical product league would look like? I know I’ve had a couple of ‘moments’ in a sleep deprived and stressed state, usually amongst the stock cages, boxes and silent staff restacking shelves around midnight in Tesco when I’ve looked like a twitching C3PO. What is more important healthy, organic, Fairtrade, local sourced, packaging, promotion, producers other CSR activities? Ignorance would be bliss!

In today’s economic climate I’m fascinated to see where the next 12 months will take our spending. I’d rather buy one organic (and soon to be home grown) spud than a big plate of McCain’s chips anyday. Would you?

Here’s one heartening report by the Co-Operative Bank worth a look. click here