Business Respect - CSR Dispatches No 140 - 10 Nov 2008

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An email newsletter with news and discussion focusing on corporate social responsibility globally, looking at the companies in the news and the emerging issues. Linked to the website at http://www.mallenbaker.net and produced every two weeks.

In this issue we look at what makes good social marketing.

In the news:

Feature articles on the internet:

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Topics:

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Copyright 2008 Mallen Baker. All rights reserved. For information on how to subscribe, go to http://www.mallenbaker.net/csr/nl/subscribe.html

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Welcome

So this week, I will be talking to an international meeting of national lottery providers about socially responsible gaming. It's one of those fascinating areas, because it is all about how companies not only sell their products, but ensure that the products are used or consumed responsibly - which can be hard to do when not all the incentives of the marketplace give the right signals.

And that is very much the theme of this issue. In the UK, we are seeing the finalisation of a set of standards for social marketing - the art of influencing citizen behaviour not just consumer buying preferences, and this is the focus for the lead article this time.

Some have been very quick off the mark to welcome and build on these new standards. Business Respect sponsor Corporate Culture, for instance, has shown blistering speed in getting its Social Marketing Academy ready to begin training marketers against the new framework. See the sponsorship message in this edition for more details.

In the mean time, my article last week that commented on David Vogel's piece on forbes.com provoked a thoughtful response from the man himself. An extract of the key points:

"While it is true that no CSR advocate has ever explicitly claimed that all a company has to do to be profitable is to be responsible, the business case for CSR, which is repeatedly endlessly and widely believed, is that a firm must be responsible in order to prosper - and that irresponsible firms face a dim financial future. It is that (naive) claim that my article challenged ...

"To clarify: my challenge is not to the claim that CSR is both necessary and sufficient for business success - which I agree no one argues - but rather to the claim that CSR is necessary for corporate success - a position which virtually every CSR advocate believes."

The truth is that David and I agree on a lot of this - long time readers will be familiar with my own line that a commitment to CSR does not abolish the laws of gravity - ie. you still have to get your business fundamentals right. But you can make that argument from a pro-CSR platform, or you can make it from an anti. Readers of forbes.com can be excused for thinking that an article headed 'CSR doesn't pay' is anti.

Thanks to David for the clarification, and for provoking thoughtful debate on the subject.

Thanks also to another correspondent - this one from an international law firm, who gave the following response.

"Just wanted to comment that I really appreciate the clarity of the argument against the argument against CR. The traditional argument against - ie. that it's fluffy philanthropy - is totally at variance with the many people I have met in the sector who are interested in anything but and are very serious in what they are trying to achieve for the business and all its stakeholders (employees, clients, shareholders/owners, wider community). The job is to recognise the shifting expectations of society and to articulate the full role of the business community, to identify the highest standards and work towards them in the recognition that the task is never fully complete because the standards are raised ever higher."

Thanks to all. One last note - this issue I am trialling a new emailer service to send the newsletter out. If you have any problems you don't normally have, let me know.

Mallen Baker
mallen@mallenbaker.net

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CSR News 10 Nov 2008

Pakistan: KKI directors arrested over alleged illegal money transfers

The directors of Khanani and Kalia International, one of Pakistan's largest foreign exchange companies, have been arrested in connection with illegal transfers of foreign currency out of the country.

At a point when Pakistan's economy is in crisis, there has been a flood of money out of the country prompted by the plummeting value of the rupee.

A computer thought to contain details of the illegal transfers was seized in the arrests. Money is thought to have been transfered to accounts in Europe, the US and the Gulf.

The company denied that it had been involved in illegal transfers.

US: Nine out of ten business leaders think CSR will thrive under Obama

Nearly nine out of ten business leaders polled by Business for Social Responsibility have said they believe that US President-Elect Barack Obama will have a positive impact on the promotion of the corporate social responsibility agenda.

The survey respondents focused on what they saw would be the three most important steps that the new president should take, which were to promote investment in renewable energy and carbon capture, to develop a climate change mitigation strategy, and to initiate partnerships between business, government and civil society.

The near consensus was also that there would be increased regulation of corporate activity, particularly on climate change and financial transparency.

Netherlands: Shell faces lawsuit over Nigerian oil spills

Oil major Shell is to face a suit in its home base based on accusations that its operations have led to environmental damage in Nigeria. The suit, which is to be brought by four Nigerian fishermen and farmers along with Friends of the Earth, will focus on activities in the Niger Delta region.

Friends of the Earth have said they hope the lawsuit will make the company take notice, being brought for the first time in a Dutch court. The group alleged that the company disregarded actions brought against it in Nigerian courts.

According to the suit, oil spills had resulted in soil and water that could not be used for agriculture or fishing, even nearly three years after the spillages occurred.

Shell has said that the spillages in question had come about by the hostile actions of third parties, and that the company could not be held liable for the damage so caused. The company had taken corrective action in line with regulations in force.

EU: Businesses told to avoid blacklisted chemicals

The European Chemicals Agency has released its first draft blacklist of chemicals that may soon be covered by new legislation that terms them as of Very High Concern, and is urging businesses to plan now for the point when the list is confirmed.

The Candidate List includes 15 chemicals whose use would be progressively restricted over time. Companies whose products use any of these chemicals will be required to provide information on the chemical to any consumers on request, and will need to notify the European Chemicals Agency of products using them from the end of 2011.

Over time, companies will be required to phase out the use of the chemicals altogether unless they can provide conclusive evidence that no viable alternatives are available.

UK: BT fined for targets scam

UK telecoms company BT, seen by many as a leader in corporate social responsibility, has been required to pay the government's Ministry of Defence 1.3m UK pounds in compensation after it was found to have fixed figures relating to performance targets.

The company was found to have met targets for length of time for calls to be answered after some of its staff phoned each other, helping the company to avoid penalties in its contract.

BT said that the action was unauthorised, and it has sacked some of the staff involved. The Ministry also came in for criticism by a Parliamentary committee for its lack of oversight.

Indonesia: Mars attacks destruction of 'safe products'

The Singapore subsidiary of confectionary company Mars has said that its products are safe to eat despite the destruction of some of its chocolate by the Indonesian food and drug agency BPOM as part of its action against Chinese imports following cases of melamine in dairy products.

According to PT Mars Symbioscience Indonesia tests on its products had shown that they were clear of melamine and completely safe for consumption. The BPOM results suggesting the contrary appeared to fly in the face of data from a number of other independent laboratories, all of which suggested that Mars products made in China were free from melamine.

The company said that it had an agreement with BPOM that products would not be destroyed unless further tests showed there was a problem, but this agreement was not honoured.

China: Baidu joins UN Global Compact

Baidu, the main competitor to Google's search engine in China, has announced its commitment to join the UN Global Compact with the intention of sharpening its focus on corporate social responsibility.

Baidu, which stood to be chief local beneficiary of the controversy in the US over Google's agreement to allow censorship of search results in China, will be one of the first Chinese internet companies to join the Compact, joining 180 other Chinese members including giants such as Sinopec and China Mobile.

Baidu has had difficulties of its own in recent months with attacks for allowing illegal music downloads to be facilitated via its search results. The Global Compact does not cover issues around censorship or intellectual property.

The company also stated that it aimed to take an active focus on other key social objectives, such as the achievement of the Millennium Development Goals.

US: Number of companies reporting sustainability doubled

Twice as many companies in the US are reporting sustainability data than in 2005, according to a new survey by KPMG. Of the top companies, 74 percent published corporate responsibility information in 2008, making such reporting now the norm rather than the exception.

The research suggested that the reasons why companies make social and environmental disclosures has changed, with a higher percentage quoting ethical concerns as the main driver for reporting, whereas in the past economic reasons predominated. (Newsvine.com)

Thailand: Anti-alcohol protesters may influence ThaiBev listing decision

Anti-alcohol demonstrations outside the Thai stock exchange have sparked debate over whether or not Thailand's largest liquor manufacturer, ThaiBev, should be allowed to be listed. Representatives of the Stock Exchange of Thailand (SET) have said that they will take the anti views into account when making a decision.

The protesters argue that allowing the company to raise more capital will lead ultimately to greater public health problems in Thailand.

ThaiBev wants to make its initial public offering involving less than 1 percent of shares in the company, 80 million shares in all.

US: Major food companies support common nutrition standards

Responding to ongoing concerns about rising levels of obesity, a number of major food companies have adopted a common nutritional standard, with a simple recognisable label for the 'Smart Choices Program'.

The standards were developed by a collaboration of companies, scientists and academics. The new label, an endorsement mark for products meeting certain nutritional standards, is expected to appear in stores for the first time in the middle of 2009.

Companies involved in the initiative include Coca-Cola, General Mills, Kellog, Kraft, PepsiCo, Unilever and Wal-Mart. The collaboration has been driven by the widespread confusion amongst consumers about a range of slightly different, competing standards.

Nigeria: Pfizer drug case adjourned

A court case against pharmaceutical giant Pfizer has been adjourned until next year, a week after the company said it would be seeking an out-of-court settlement to the action. A further civil case against the firm is to be brought alleging that its 1996 trial of an antibiotic led to the death of 11 children.

Pfizer says that it was not the antibiotic, Trovan, which caused the deaths but meningitis, which was an epidemic at the time of the trials which had taken the lives of 12,000 children. The federal government in the civil case, however, contends that Pfizer did not get proper permissions for the trail and misled the parents of participating children. It is aiming for $8.5bn in damages.

The presiding judge in the criminal case said that it had been adjourned until January to allow papers to be served on the defendants.

United Arab Emirates: ABB wins first CSR award

ABB UAE has won the award for large companies at the inaugural Arabia Corporate Social Responsibility Awards for having "institutionalised CSR for the past 14 years". Other winners were fuel producer Oman LNG in the medium-sized class, and MBS Firefighting Coatings and Environmental Centre for Arab Towns in the small firms category.

The awards, organised by the Emirates Environment Group, are supported by the UN Global Compact. The event saw a video messages from Prince El Hassan Bin Talal of Jordan who argued that CSR had to be about more than public relations.

Oman LNG was commended for looking after indigenous wildlife and providing housing for the poor. MBS had focused on ensuring a safe working environment for its employees, and the Environment Centre had been involved with raising awareness of health issues with children.

CSR FEATURES from the Internet

Employees need bigger carrot for wellness programs - 28 Oct 2008 FROM Newsvine.com

Jason Lucas wanted to snuff his pack-a-day cigarette habit, but not badly enough to pay for the stop-smoking drug Chantix.

Lucas heard good things about Chantix from his aunt. Still, the $150 monthly cost ÷ not covered by insurance ÷ seemed too steep until his employer, Monarch Beverage Co., offered to cover it.

Read full story

Corporate social responsibility in Israel - 27 Oct 2008 FROM Jerusalem Post

After 10 years of advancements in the field of corporate social responsibility, Israel's business community is about to face its toughest test yet in the wake of the current financial meltdown.

The adoption of CSR over the past 10 years has completely changed the way Israeli companies do business. With a delayed realization that CSR presents an advanced business culture, Israeli business leaders have navigated their companies from a basic approach of community investment and corporate philanthropy to the fully integrated approach of corporate social responsibility - addressing such issues as improved environmental strategies, a diversified workplace, strategic community empowerment and voluntary corporate governance and accountability.

Read full story

Recent entries from Mallen's blog

Does your system lack common sense? - 8 Nov 2008

The harassment of an elderly grandmother by Virgin Trains is an illustration of what can go wrong with the most well-meaning of systems. Lena Ainscow, 75, was reduced to tears when, having bought a cheap advanced ticket and having been advised by the company's own staff that she could board the train, she was told by the on-board manager that her ticket was wrong, and she had to pay full price for a new one. But wait, it gets worse. Read more

Your cashflow or your life - 28 Oct 2008

So you run a supermarket. I sell you products to sell in your shop. I deliver. They're good products, and they sell within a week. Why then, would you take 60 to 90 days to pay me? Read more

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How do you sell respect to roadhogs?

Article by Mallen Baker

Since the beginning of the age of film and TV, governments have tried to use this powerful medium to tell people how they should behave. One of the most famous attempts is the British advert that ran in cinemas in 1948 to tell us to cover our sneezes.

"Sneeze into the handkerchief and then put the handkerchief into the bowl of disinfectant to kill the germs, not in the family's washing.

"Got it? Sure? Good! Remember; Don't spread germs." All this delivered in a very clipped British voice.

There followed a whole raft of such ads. There was the cat called Charley - who told children not to go with strangers or to play with matches. Delivered in a more modern hard-hitting style, there were tombstones to warn of the risk of HIV/AIDS.

These ads had a number of things in common. On the one hand, they were easy to parody. AA Gill complained that they were "useless truisms delivered by the Ministry of Don't Do That". On the other hand, although they sometimes hit the right nerve, they were often remarkably ineffective.

And yet social marketing - marketing that aims to change people's behaviour rather than simply to sell a product - has an important role particularly in a world that needs to become sustainable. How can it move beyond the facile into the effective?

Simply by understanding what the marketers already understand - you have to understand who it is you're trying to influence, and what are the levers that will make them actively want to change. The Ministry of Don't Do That won't swing it for many key audiences.

We've seen some good examples of how the private sector can address such issue, for instance with Diageo's UK advertising aimed at encouraging people to drink responsibly.

But one of the best examples of how this can work effectively comes from the public sector, and from Australia. In New South Wales, they took the challenge of trying to persuade the group most often to be found driving recklessly or breaking the speed limit - young men between the age of 20 and 35 - that they shouldn't. Tough call.

They did it by aiming the message not so much at the drivers themselves, but at their peer group. It is peer group acceptance and encouragement that drives such behaviour.

They created a mocking hand signal which consisted of waving the little finger. The implication was that the person who had inspired them to make this hand signal was a man driving his big car because he was trying to compensate for a personal inadequacy. You get the idea.

The advert became the most effective they had ever run, and people began to take up the easily imitated signal to mock their friends when they drove in a way they felt uncomfortable with. Suddenly, the belief that driving macho was alpha male behaviour was turned on its head.

In a demonstration how much some men took the signal to heart, one even gave in to a fit of temper when a woman he'd just cut up made the signal to him, hurling a bottle of water out of his car at hers and earning himself a hefty fine and plenty of newspaper stories that will have confirmed his status to a much wider group of his peer group than might have been the case.

This was marketing at its best. Understand the target and what motivates them, establish what the levers are that need to be pulled in order to gain acceptance and desire for action, play these in a funny, non-preachy way that people will begin to talk about (it was certainly that) and imitate. Now all we need is one of those for a range of sustainable behaviours.

I was recently involved with, although can take no credit for the outcome of, a Social Marketing Working Group that has been creating a set of National Occupational Standards for the creation of such social marketing campaigns. If followed smartly the framework could help the creation of a higher number of quality social campaigns.

As you might expect, it covers details of how you carry out the right research - understanding the concerns, priorities and the mindset of your target group is key to success, as well as properly testing out whether your approach is likely to be successful in influencing the group.

Of course, standards alone are not enough. You can implement any system to poor effect if the skill in execution is poor. But at least for the first time, there is now some real clarity about what are the steps that can make this successful. I expect private and public sector marketers alike to take real interest.

In the mean time, those companies that often find themselves in the difficult position of having not only to promote their products, but to promote responsible consumption of those products could learn by the example above. Take the computer game industry, for instance. It knows it is part of the problem of growing levels of inactivity and obesity, but short of having games that stop after fifteen minutes until the player has agreed to run around the block, it has been hard to work out what to do about it. And yet, the scope for peer mockery over sad cases spending their lives excessively playing such games rather than being out being part of the cool crowd - well, there must be some potential. You just have to find a way to do it that makes it cool to play the latest game, but uncool to play it so much it unbalances your life. But then maybe the right research would come up with an alternative approach.

It would be good to see an industry sector rise to the challenge of such advertising before it's under so much pressure that the commentators presume it is just a last minute attempt to stave off legislation.

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In the news from the latest issue

Apple suppliers in bribery charges

UK: Gap, Next and Marks & Spencer respond to Indian worker abuses

British court delays Yevgeny Chichvarkin extradition hearing

New integrated reporting coalition launched

Netherlands: Trafigura guilty of exporting toxic waste

Kazakhstan: Philip Morris suppliers used child and forced labour

US: Nestle to drop 'deceptive' health claims

China: Hang Seng launches corporate sustainability index

Monsanto GM seed ban is overturned by US Supreme Court

Bhopal trial: Eight convicted over India gas disaster

Nestle announces NGO partnership to verify palm oil

Macmillan faces World Bank ban over Sudan payments

Mining giant BHP Billiton admits it may have bribed foreign officials

Foreign firms pledge not to give bribes in Russia

... more news stories

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Business Respect - most recent edition added on 9th August 2010