CSR Roundtable: Purposeful pursuit

Participants (alpha order)
-Lee Ballin, head of sustainable business programs, Bloomberg
-Scott Beaudoin, global practice director, corporate and brand citizenship, MSLGroup
-Amy Binder, CEO, RF|Binder
-Anne Buchanan, president, Buchanan Public Relations
-Lenore Feder, director of comms and CSR, Viacom
-Joy Lehman, global sustainability manager, Hertz
-Karyn Margolis, director of CSR and sustainability, Avon
-Christine Riley Miller, senior director of CSR, Dunkin’ Brands
-Richard Woods, SVP of corporate affairs, Capital One

Evolving definition
Gideon Fidelzeid (PRWeek): CSR has evolved to mean different things to different entities. How would each of you define it?

Amy Binder (RF|Binder): There is no one definition. Depending on the organization, it could be philanthropy, value creation, or risk mitigation. Generally, though, it has to do with the communities in which you operate, but even then it could be driven by different reasons. A key point, however, is that sustainability and CSR are different. The former relates to issues that impact the sustainability of a company. That’s not the same as CSR, though the two certainly could intersect.

Richard Woods (Capital One): Arthur W. Page said businesses basically come into existence through public permission and are sustained through public approval. Getting that permission and sustaining that approval is core.

CSR means making the people and communities we serve more successful, especially, but not limited to, people and communities with low-to-moderate incomes.

Christine Riley Miller (Dunkin’ Brands): The directive of our CSR practice is to protect and enhance brand reputation. We do that through our sustainable business practices.

We are digging more deeply into what sustainability really means and how we ensure the long-term sustainability of our business. It’s how we communicate what we are doing externally in a meaningful way and integrating that into the DNA of our company, as opposed to just talking about CSR anecdotally.

Lee Ballin (Bloomberg): We’re at a tipping point for CSR where philanthropy is no longer just about giving money. It’s about sharing the skills your company has inside its offices to help nonprofits beyond financial empowerment. I like to call it CSO, corporate social opportunity. It’s taking your core competencies and providing solutions to your customers that will help them thrive in a low-carbon 21^st century economy.

Anne Buchanan (Buchanan Public Relations): While most of our clients are engaged in some form of CSR, almost nobody calls it that. They tend to talk about giving back or community involvement.

In the nearly 30 years I’ve been watching this evolve, CSR has moved focus from activity to outcomes. What have we really done to change things in the community? It has also become so much more about authenticity, which means getting employees involved and getting your hands dirty for the cause.

Joy Lehman (Hertz): CSR falls under the umbrella of sustainability. Given the business we’re in, a lot of that sits within the environmental world. However, we recently moved our headquarters from New Jersey to Florida, so we’re looking at a new employee base. Where you are is an important part of sustainability and CSR, so whereas we used to solely focus on fuel economy and our carbon footprint, now we look at what these new employees want to see from us as we enter a new area.

Lenore Feder (Viacom): We’ve all talked about how CSR has evolved from something done on the side to being part of the business. It has taken a step further, though, to where it is truly becoming the essence of the business and the brand. It’s who you are and what you stand for. It’s employee engagement, philanthropy, and social partnerships, but it’s equally how we talk to our audiences, how we’re helping them raise their own voices, and how we’re building even stronger connections with them.

Scott Beaudoin (MSLGroup): The word "responsibility" challenges me a bit because I feel it is table stakes. The businesses doing well in society are those looking at environmental and social issues as opportunities to bring their business forward.

We grappled with what we were going to name the dedicated practice at our firm and we ended up with corporate and brand citizenship. We are all citizens of the world and it’s our responsibility or opportunity to see how we can move society forward, including, of course, business leaders.

Karyn Margolis (Avon): When David McConnell founded our company in 1886, he said it has an obligation to corporate citizenship and a commitment to the well being of society and the environment. It’s what our company has been about ever since.

We empower women by giving them a low-cost entry into owning their own business, particularly in the developing world or low-income communities.

In terms of evolution, our breast cancer funding is a good example. We have long focused on giving grants so agencies could provide care. Now we’re delving deep into the causes of the disease and finding ways to prevent it for future generations. That represents a sustainable, forward-looking approach to CSR.

Binder (RF|Binder): It’s interesting how some people have a slight problem with the term "corporate social responsibility." What is a better term for it? Might it get higher-level attention if it were called something else?

Miller (Dunkin’): Interesting anecdote. I was looking to fill a "CSR manager" position. I was very specific in detailing the responsibilities – reporting, stakeholder engagement, and issues management. The number of people I got with philanthropy backgrounds despite the fact there was not a single mention of philanthropy in the outreach was frustrating, but it highlights how CSR has evolved to include so many things. In truth, you do it a disservice by trying to find a blanket term.

Ballin (Bloomberg): We have four distinct groups that when put together would be called CSR, but they enable us not to call it such. We have Sustainability, Philanthropy and Engagement, Diversity and Inclusion, and Wellness. By having those four different disciplines, we can communicate, both internally and externally, exactly what we are engaging in.

Teachable moments

Few people understand the importance of CSR, especially how it affects business, better than Geoffrey Heal, Donald C. Waite III Professor of Social Enterprise at Columbia Business School and author of 18 books and 200-plus articles on the subject. Below are some key takeaways from his conversation with PRWeek’s Gideon Fidelzeid:

•How CSR has evolved to where it is today
In the ‘70s and ‘80s, people had values and causes of import to them, but you didn’t bring it into your commercial life. Today, people look to use their commercial involvement to promote the causes that matter to them. Furthermore, consumers are using their shopping carts to change society.

•CSR’s impact on brand value
The value of the brand is overwhelming for most American companies these days. It certainly depends on product functionality, but it also very much depends on whether people think the company is a positive force in society. CSR is front and center in that equation.

•How investors view CSR
Numerous studies show a strong correlation between high environmental performance and high stock-market valuation. About 15% of all institutionally managed money in the US goes to SRI (socially responsible investing) funds. And if you speak to CFOs, many actually like having sustainable investors because they tend to buy and hold.

•Hard evidence that CSR impacts consumer purchasing decisions
In 2011, Columbia University researcher Ray Fisman did an experiment with eBay on products that had been sold on the site with and without a charity tie-in. On average, he found those with the tie-in sold between 5% and 10% more. And they sold significantly faster.

Click here for more thoughts from Heal on brands leading the way, student perspectives, and the keys to CSR reporting.

The business case
Fidelzeid (PRWeek):How does CSR specifically impact a company’s bottom line?

Binder (RF|Binder):Value creation. Look at CVS. It created value by reinforcing its purpose. But there is also the stock price. SASB [the Sustainability Accounting Standards Board] is instilling a real sense that sustainability issues are material. And a recent Harvard study indicated a belief that if they are material, they need to be reported in a company’s 10Q [quarterly report to the SEC]. If they get reported, data points need to be broken down. And once you start reporting those details, it becomes open to investors.

There is a prevailing sense that over the next five years the majority of companies will be doing such reporting. That will have an obvious and deep impact on stock price. 

Woods (Capital One):Major moves made by banks generally require regulatory approval. When you apply for that approval, the doors are typically open for public comment. We were the subject of one such set of hearings, called for by the Federal Reserve, when we announced our intent to acquire ING Direct [in 2011].

Anyone is entitiled to comment and testimony is often given on the grounds of whether or not the move’s net impact will be good for communities and the banking system. Notice that the standard was neither a legal nor a regulatory one. It was incredibly important for us to have allies. And we did, based on relationships we built through the community work we were doing. CSR helped pave the way for a major business move.

Miller (Dunkin’): We are nearly a 100% franchised organization, so our bottom line is the profits our franchisees make. What they care about is making money on the ground. As such, you really need to make a solid business case to convince them CSR efforts will impact their profitability. If you decide a portion of any sales will go to a cause, that comes from their bottom line. In many ways, a company such as ours must take a more pragmatic approach.

Ballin (Bloomberg): For so long, the prevailing philosophy has been it’s a good thing to do and it makes good business sense. We want to flip that to where people instinctively think it makes good business sense and it’s a good thing to do.

My division works with 21 different operating groups within the company. The portfolio approach we’ve taken to our environmental projects has saved the company $68 million since 2008. Our chairman also chairs SASB, so we place all the relevant information on our CSR efforts right next to the traditional financial analysis. And the number of investors looking at this information grew 70% from 2013 to 2014. In prior years, that rate grew about 40% each year, so it’s clear investors are using this data as part of their decision-making process.

Buchanan (Buchanan): An interesting development is the rise of entities whose line of business could very much qualify as CSR. There is the Community Development Finance Institution. Its major funders are banks that earmark funds to be put into under-banked communities. There are also ethical sourcing companies. When they go abroad to get garments made, these companies make sure they do so in plants where workers are paid fairly and treated ethically. An industry is growing up around helping major brands behave ethically and in a socially responsible manner.

Lehman (Hertz): We work with most Fortune 500 companies, so in addition to being a service provider we are also part of many organizations’ supply chain. Creating more sustainable travel options is a real business opportunity for us because many of the companies we work with have sustainability commitments around no carbon and the like, so we have an active role in helping them manage and reduce it. Our relationships have grown beyond the transactional to where we are working together to accomplish a sustainability goal.

Feder (Viacom): Advertising is a very significant part of our business. Over the past few years, the sales team has increasingly come to us because advertisers are more interested in marketing their social responsibility positions. They look to us to either develop an initiative or help them market existing efforts.

Beaudoin (MSLGroup): We recently worked with a pharma company that was struggling to get tenders in the EU. We helped put together a campaign that underscored everything this company was doing in the supply chain and it helped them win approval. That’s a profit example right there.

The book Grow, written by former Procter & Gamble CMO Jim Stengel, looked at stock performance and growth of the major companies and there was a direct correlation between those companies’ core ideals and their profit growth over a period of time.

Margolis (Avon): We have 6 million Avon representatives around the world. They are our brand ambassadors and the ones selling our products. We create special fundraising items for specific causes where major proceeds are donated. These products lead to conversations with customers about what Avon is doing. It helps customers realize Avon stands for more than just beauty. There’s purpose behind it. That brings brand loyalty, which certainly has a bottom-line impact.

Woods (Capital One): A sustainable, corporately responsible profile goes right to the heart of our product itself, how it’s priced, how it’s marketed, and who we can market it to. That extends outward to the net impact you have on communities. We also have the Community Reinvestment Act, which requires banks to be involved in community development. For banks, in particular, CSR and reputation go hand in hand as it gets to the heart of how you engage with your community and customers.

More than words
Fidelzeid (PRWeek): Beyond speaking publicly about it, what responsibilities should communicators assume in advancing a company’s CSR efforts?

Beaudoin (MSLGroup): Our responsibility is to find the authenticity in CSR initiatives for companies and brands. There are so many great narratives and storytelling opportunities that come out of CSR initiatives and communicators are perfectly equipped to find them.

In addition, brands need to have a point of view. It’s not just about what you are doing to drive more sustainable business practices or social impact in the communities in which you’re operating. What’s your point of view in the areas you work in? Does something need to change? Do you see it a bit differently than others? That point of view is so important to the younger generation and it’s an element of CSR PR pros can truly help identify.

Ballin (Bloomberg): You have to avoid showboating. Coming out with these big proclomations will just open you up to criticism. However, if it’s a constant theme threaded into everything you do, you will build trust with all audiences that your CSR efforts are truly integrated into your company’s DNA.

Feder (Viacom): Research plays a huge role in how communicators help shape CSR initiatives. From the platforms you use to spread the message to the partners you choose to work with to any calls to action you initiate, the communicator needs to be involved at every turn.

Miller (Dunkin’): Communicators need to fundamentally understand CSR’s value add to the business. It’s one thing to just say, "Oh Rainforest Alliance, certified dark roast, we’re really excited." Do you understand why we’re doing a certification program? And if you do, you need to know it’s less about the label of being Rainforest Alliance-certified and more about the credentials and weaving that into the entire narrative of the product story.

Binder (RF|Binder): CSR is one of the areas where communicators can really get to the business strategy and help drive it. As Richard noted before, CSR can absolutely help build a brand’s reputation in the business objectives, so everyone involved needs to be working at the business-strategy level. It’s about getting it right, getting it focused, and making sure it really supports the purpose of the business.

Woods (Capital One): There are three things communicators must do. First, be great listeners so they can truly understand where people are coming from. Second, they need to be the biggest advocates within the company to get everyone to respond constructively to what they are hearing in ways that create a great fact set. Third, of course, is the engagement part. And in this case, it’s just as important to show as it is to tell. And none of the factors can work wihtout the others.

Margolis (Avon): The communicator’s role in the CSR world is part negotiator, part mediator, part diplomat. You hear external stakeholders’ concerns and you need to be able to communicate those back to business partners. You then hear their concerns and you need to negotiate a solution that works for everyone. It’s a much broader role than typical communications. There is so much one-to-one work in trying to get the business aligned with what external expectations are and then communicating that appropriately.

Buchanan (Buchanan): In the CSR arena, communicators really need to step back more than they are used to. From a very practical standpoint, we’ve had so much more success when we allow the recipients to tell the story rather than beat the chest of the organization that made the donation or launched the drive. Let those you intend to serve be the standard bearers to carry the story. It has so much more impact that way.

Lehman (Hertz): While storytelling is part of a communicator’s remit, its impact in the CSR arena is particularly strong. You can collect all the data in the world, but you must take it and create a personal connection with various audiences. You have to take a big corporate story and make it meaningful for individuals. The impact storytelling has is very powerful in this area and, as such, amplifies PR’s powerful role.

Beaudoin (MSLGroup): There was an "A-ha" moment in my career last year related to Dumb Ways To Die [the big winner at the 2013 Cannes Lions International Festival of Creativity]. It was an effort out of Melbourne designed to keep kids off of railroad tracks.

It wasn’t only creative and communications that came up with the idea. They brought in members of the younger generation and they all came up with it together. This idea of co-creating stories is so powerful, especially in the CSR arena.

The right fit
Fidelzeid (PRWeek): What are the keys to selecting the correct partners or causes to work with?

Miller (Dunkin’): One of our causes is hunger. We’re a food company. We’re also a national brand with local business owners. As such, we sought a national partner that had a local presence in communities and, in turn, could have local relationships and local relevance to those communites. Feeding America fit us perfectly.

It’s a national brand, as we are. It has a network of food banks very much tied to the needs of local communities. It helped us build a great network of local relationships with our franchisees and local field teams who could then partner with their local food bank in a way that makes sense for the community. It was a perfect match not just of cause, but also of business model.

Margolis (Avon): About ten years ago, at a point where our work in breast cancer was well established, we sought a second cause to champion. After much analysis, domestic violence emerged as an issue of great importance to women. And a key factor that makes it work so well for us is that it not only aligns with our brand, but it personally resonates with our representatives.

Feder (Viacom): For a company such as ours, addressing issues our audience cares about – which we determine through tons of research and surveying – is crucial. And the causes we partner with are a key result of that.

Another big challenge for us is deciding what celebrities we work with. Too often you’ll come across a big star who just wants the brand recognition, but isn’t really devoted to the issue and doing the necessary work. Part of research is making sure the celebrity with whom you will work is dedicated.

Woods (Capital One): There are limitless great causes out there, so for us it’s about identifying those that seem to grow organically out of our strategy. And it has to tie into the business in a tangible way.

With respect to partners, we need to see a line of sight. We need to see not only how they can help us complete our mission in this area, but also how we can help them complete their mission. Because of that commonality of interest, we can expect a long, very fruitful relationship.

Lehman (Hertz): Disaster relief is a major one for Hertz. Think about it. After a large tornado, a lot of cars are destroyed. We also have an equipment rental business. After Superstorm Sandy, we saw firsthand how the availability of food was hugely compromised. Food banks were severly stressed and we saw an opportunity to help them in a way that actually made sense for our business, particularly the Auto Transport part of our company.

The cause or partner need not always be something to which you can draw a straight line. In fact, sometimes it’s those different opportunities that really work well. 

-PR WEEK