Consumers are becoming ever more conscious about CSR issues. As a result, today’s companies are having to rethink what they should or could be doing to reflect their commitments in the marketplace, argues Nicky Amos, former head of CSR at The Body Shop.
Retailers are poised to embark on a new way of thinking about corporate responsibility. They know it is no longer enough to distinguish a brand from the competition through pricing, quality and placement strategies. While good customer service remains the most vital element of the retail survival plan, today’s more progressive companies are recognising that the marketplace has become a more sensitive place. As consumers become more exposed to, and therefore better informed about, human rights and supply chains or product stewardship and the environment, so companies are turning the looking glass on themselves.
The realm of CSR is breaking out of its corporate cocoon and entering the marketplace in a more visible way than ever before. Companies are falling over themselves to demonstrate their more ‘responsible’ side, offering more ‘healthy’ food options, more free-range, organic and fair trade produce, and more environmentally responsible products and packaging. The debate will continue about whether this really is about companies responding to what they ‘should’ be doing or, more likely, creating opportunities to re-define themselves and broaden the consumer offer.
This is not a call for yet another wave of corporate green-wash or guilt-marketing. It’s about retailers tuning into the sensitivities in the marketplace and engaging people in subtle dialogue about responsible retailing. In its centenary year, Waitrose is leading the charge. It has gone back to its roots by selling fresh produce sourced locally from independent farmers. It’s a simple enough plan – everybody wins – the customer enjoys fresh, local produce, the farming community gets the support it so desperately needs, and Waitrose is able to champion its role as a supermarket with a conscience.
In a similar vein, B&Q has made a strategic decision to only purchase wood from proven well-managed forests or recycled materials. Not only have they demonstrated through their actions a committed approach to managing their impacts, they have also made the customer central to their strategy. Unlike some retailers, they are not asking customers to make ethical choices; the choices have been made for them.
For now, it may well be that retailers are pushing more than consumers are pulling. Some initiatives may be a little crude, but there are many opportunities for retailers to develop more innovative and sophisticated approaches to brand and values marketing that accord with consumers’ moral and ethical sensibilities.
In the future, it is my guess that companies will be looking to integrate their CSR, brand and cause-related marketing messages into a coherent dialogue with consumers that inspires them, not just in their products or services, but in the way they do business. Strong CSR communications can demonstrate that otherwise faceless brands also have a human dimension and that responsible retailing can be a force for positive social change. Good shopping has every chance of getting even better in the future.
Nicky Amos is CSR Director at Corporate Culture. Corporate Culture combines marketing communication skills and corporate responsibility expertise to help organisations achieve social and business benefits. Its work is focused on four core areas: social campaigning and marketing; CSR strategy and communications; brand and reputation management; employee culture and internal communications.
Consumers: inventive incentives
July 01 2004
by Briefing staff
Consumer capitalism succeeds by giving people what they want. So why do so many say they want responsible products, but rarely buy them? The absence of any tangible incentives could be the answer.
The Co-operative Bank calculates that its profits attributable to ethically motivated customers rose by more than a third to £40m in 2003. During the last financial year, the bank’s pre-tax profit rose by six percent to £130.1m. It puts most of the rise down to an increase in the number of loan account clients and Visa credit card holders joining for ethical reasons. Research indicates that the value of business attracted by the bank’s stance on ethical and social issues far outweighed the business lost by turning away customers with poor human rights records or weak environmental performance. The cost of turning away business on ethical or ecological grounds rose from £4.38m to £6.9m. The amount lost by refusing to do business with companies supplying arms to oppressive regimes nearly trebled, to £709,500. The cost of turning away business for animal welfare reasons jumped from £158,000 to £556,500. Contact Natalie Kurpas, Co-operative Bank, on 0161 829 4244 (http://www.co-operativebank.co.uk)
Shop and give
The Co-op supermarket group is encouraging community groups and their supporters to use its new Dividend Partner Card scheme. Customers with Dividend cards already get 3% of everything they spend on Co-op brand goods given back them, and 1% from almost everything else. The new scheme allows card-holders to give the money to community group or charity of their choice, as long as the group has a Partner card. Groups are paid their ‘dividends’ twice a year in vouchers to spend at Co-op food stores, or to exchange for cash to spend on goods for their organisation. Contact Martin Henderson, Co-op, on 0161 827 5292 (http://www.co-op.co.uk)
The Co-op announced on May 13 that it has banned a range of potentially dangerous chemicals from its own household cleaning brands and other everyday products. Some studies have linked the banned chemicals, which are still legally usable, to cancer, fertility problems and environmental damage. The supermarket is also spearheading an initiative to raise ethical standards in supermarket products in the UK. It has recruited a panel of ten experts chaired by Tim Lang, Professor of Food Policy at City University. The role of the panel is to help identify and act on issues that pose risks for the supermarket industry. Contact Michelle Vernon, Co-op, on 0161 827 5290 (http://www.co-op.co.uk)
IKEA, The Body Shop, Marks & Spencer and B&Q are the companies with the most progressive policies for restricting and disclosing the chemicals used in their products, according to a survey of 28 brand name retailers operating in the UK (see table). Shop Till You Drop? – Survey of High Street Retailers on Risky Chemicals in Products, published by Friends of the Earth on June 1, also finds that while 11 companies failed to provide sufficient or any information for the survey, all responding firms showed an improvement in their policies since a previous FoE study in 2002. The environmental group is calling on companies to disclose their policies on hazardous chemicals and report publicly on progress. Contact FoE on 020 7490 1555 (http://www.foe.co.uk)
Fat of the land
An International Business Leaders Forum working paper on Health, Eating and Active Lifestyles argues that the debate over obesity is hampered by a ‘culture of blame’, in which certain companies are disproportionately targeted. While consumers and pressure groups continue to point the finger at high profile food companies, the paper suggests a broader view of responsibility for the problem, and proposes that 10 key sectors take action in a spirit of partnership and collaboration.
Entertainment and hospitality, heavy industry and home appliances are among the sectors which are urged to take measures promoting better nutrition and greater physical exercise. While helping to deal with the obesity epidemic, companies can also tap important business benefits. Contact Olivia Boles, IBLF, on 020 7467 3600 (http://www.iblf.org)
Media interest in obesity has almost tripled (up 294%) in five years, according to a report from Echo Research. Obesity in the Public Eye, released on May 26, draws on around 9,000 media items published worldwide. It finds that obesity is now ranked with diabetes and cancer as a major life threatening issue in many parts of the world. The UK debate is politicised with government leading calls for regulation on advertising, promotion, vending machines and food labelling. In the US, litigation is viewed as an essential tool to curb the obesity trend. Global brand names are portrayed as at the centre of the problem as well as offering potential solutions. Contact Nigel Middlemiss, Echo Research, on 01483 413 650 (http://www.echoresearch.com)
obesity ups margins
Swiss Re has warned that life insurers will need to charge obese people higher premiums for cover as the obesity epidemic starts to affect mortality rates and insurers’ margins. In the US where a third of adults are obese, death rates are nearly twice as high as they might have been if obesity levels remained at early 1970s levels, according to Swiss Re. Contact Tim Dickenson, Swiss Re, on 020 7933 3445 (http://www.swissre.com)
McDonald’s announced on April 15 that it is to work closely with the US Government to contribute to alleviating obesity. The new approach comes in the wake of recent statements by the US Department of Health and Human Services encouraging the business sector to take more responsibility. The company is approaching the issue from three angles: improving food choices, providing education and promoting physical activity. Contact Lisa Howard, McDonald’s Corporation, on 00 1 630 623 5044 (http://www.mcdonalds.com)
fair trade espresso
Oxfam is to launch a chain of fair trade coffee shops in what the charity claims is a UK first, it announced on May 13. Running under the Progresso brand, Oxfam plans to launch three outlets by the end of 2004 and have a chain of 20 within the next three years. Producer co-operatives will own a quarter of the firm’s shares and a quarter are being held in trust for projects in the wider grower community. Oxfam, which co-founded Cafédirect in 1991, will own the remaining half of the shares in Progresso. Oxfam is partnering with Glasgow-based independent roaster, Matthew Algie, in the project. Both parties are providing initial funding of £50,000 for the Progresso chain, which will be a standalone operation. Contact Katie Abbotts, Oxfam, on 01865 312 334 (http://www.oxfam.org.uk)
Sainsbury’s has won the Soil Association’s Organic Supermarket of the Year award for the third year in a row. Sainsbury’s performed well across all eight judging categories: quality and choice; UK and local sourcing; ethical trading; the environment; animal welfare; customer satisfaction; value for money; and consumer education.
The supermarket has since announced that it is introducing GM-free milk. The move follows a prolonged campaign by the activist group, Greenpeace. The milk comes from farms where cows receive feed that does not contain GMOs. Contact Pip Wood, Sainsbury’s, on 020 7695 6000 (http://www.j-sainsbury.co.uk)
Tesco announced on April 29 that it is to offer UK car drivers environmentally friendly diesel in 21 of its petrol stations. The supermarket has run a successful pilot of the scheme at its Hatfield site since February 2003. It hopes that the roll-out scheme will push up demand by an estimated 10-15m litres over the next year, reducing carbon dioxide emissions by over 2,000 tonnes. Contact Tesco on 01992 632 222 (http://www.tesco.com)
Reward and recognition could be a more effective way of ‘greening’ people’s behaviour rather than punishing and taxing them for not being environmentally friendly, argues a new report by the National Consumer Council and independent think-tank, new economics foundation. Carrots not sticks proposes the use of a reward card that encourages sustainable purchasing and behaviour, with points that can be redeemed on sustainable goods and services. The concept is based on the NU card developed and piloted in Holland. Contact nef on 020 7820 6300 (http://www.neweconomics.org)
EDF Energy is to invest £9.5m towards eradicating fuel poverty in six London boroughs. The energy provider’s Warm Zone scheme provides households with an energy efficiency assessment and measures including loft insulation and cavity wall insulation. Piloted and developed in Newham, the scheme will now be extended to six neighbouring boroughs and stands to help up to 80,000 homes stay warm and save money. Contact Richard Robinson, EDF Energy, on 020 7752 2266 (http://www.edfenergy.com)
Dixons bags award
Dixons has won the Best Environmental Initiative award for its new 100% recycled carrier bag at this year’s Plastics Industry Awards on May 14. Dixons was the first major retailer to introduce a fully recycled carrier bag in December 2003. The bags, designed in conjunction with Nelson Packaging, are made from waste plastics that would otherwise have been disposed of in landfill sites. In the first month of introduction, Dixons supplied customers with three million carrier bags, which meant the crude oil saving during December alone was 59 tonnes. Contact Kellie Evans, Dixons, on 0845 609 0805 (http://www.dixons.co.uk)
Intel announced on April 7 that it will begin producing microprocessors and chipsets in the third quarter of 2004 with 95% less lead than is currently used.
Contact Intel on 01793 403 000 (http://www.intel.com)
Cancer Research UK on June 4 launched Wishes, a new chain of card and gift stores, the profits of which will help to fund the charity’s work. Contact Clare Barratt, Cancer Research, on 020 7061 8359 (http://www.cancer.org.uk)