Companies that report on their social responsibility can expect to face increased scrutiny, but saying nothing really isn?’t a viable option.
“Damned if you do, damned if you don’t”. That was Ray Baker’s sentiment, expressed in a letter to the Financial Times, as B&Q’s social responsibility manager responded to criticisms of the DIY chain’s charity projects.
It is a sentiment which many executives will sympathise with as they worry about inviting criticism by reporting and otherwise trying to be transparent about their impact on society. Heads above the parapet are there to be shot at, so it seems safer just to keep your head down and say nothing.
To twist the old saying about appearing stupid: say nothing and people might think you’re irresponsible, open up and they will know you are. It is a case of “publish and be damned”, but not quite in the sense used by editors and publishers.
Mr Baker had a point. The criticism was aimed at the firm’s TV adverts highlighting its “You can do it” awards, under which community groups can get free products to do up dilapidated premises. Nobody was criticising the awards, but the Directory of Social Change was quoted complaining that B&Q would have been better giving the cash for the TV adverts to charity rather than to the TV companies. That’s the “Damned if you do”. The other side of the coin is that B&Q had previously been criticised for failing to publicise the “You can do it” scheme.
It should go without saying that the cost of the adverts did not come out of the community/charity budget. But the more important point is that applications for the scheme quadrupled after the ads – demonstrating their effectiveness, though not necessarily costeffectiveness. Starbucks is another company which can’t seem to win, but for very different reasons. The USbased coffee shop chain regularly gets it in the neck, sometimes for no better reason than that it is a US multinational.
Social responsibility dominated the firm’s annual meeting in March, which also received the first CSR report, covering initiatives to help small coffee farmers, employees and the communities where it operates, as well as environmental affairs. Despite – or is it because of – these efforts, the meeting was picketed by hundreds of demonstrators with complaints about growth hormones in the milk and GM ingredients in the pastries. The chain has also been criticised for its clustering approach to entering new locations, which swamps the area with a bunch of new stores that make life impossible for existing operators. It has also been accused of anti-union activity and unfair employment practices. There is certainly some truth in the “heads above the parapet” theory. And quite right, too, in the sense that those who claim higher standards than the norm should be judged by higher standards, and hypocrisy should be exposed. But it doesn’t always hold. Take the case of HSBC, which recently unveiled a deal with the environmental group WWF and two other conservation organisations. The bank will put 650m over 5 years into projects such as tackling pollution in major rivers such as the Amazon and the Yangtze, training scientists and saving rare plant species. Bank chairman Sir John Bond said the huge donation showed that companies have a responsibility for the planet.
All this was reported uncritically, despite the potential own goal if anybody had asked what HSBC was doing to ensure that the companies and projects it lends to and invests in were taking their responsibilities as seriously – or even why HSBC came in at 34 out of 37 banks in this year’s BiE index, with a score of under 40%.
The message from these three cases is that companies can get away with some fairly superficial CSR activity. But it is risky, and will get more and more difficult as the subject becomes better understood in the media and as more claims are made.
Once a company sets itself up as different, it is open season, which means it must expect to be challenged and has to be rigorous both about the claims and the performance. On the other hand, keeping below the parapet is less and less a viable option. Failing to report on CSR matters will invite criticism just as surely as overclaiming or under-performing.
Roger Cowe is a freelance journalist, writing regularly for the Financial Times, The Guardian and other leading journals.
Corporate Citizenship Briefing, issue no: 63 – April, 2002
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