The determinants of controversy can be grouped into three areas: provision of non-essential products with addictive, damaging potential, such as gambling and alcohol; sale of necessary products that people may not be able to access, notably pharmaceuticals and food; and products with significant social and environmental impacts resulting from their generation or use, particularly extractives, construction and agri-business, but also including banking and internet search engines.
Lifestyle choices
Ladbrokes and Camelot have both played active roles in supporting Gamcare. The charity was set up to provide counselling and practical support to people who are at risk of gambling addiction, regardless of whether or not an individual uses the products or services of either of these companies.
Similarly, Diageo, the world’s leading alcoholic spirits producer and distributor has worked closely with the Drink Aware trust in the UK, which promotes alcohol awareness and is a resource for a wide range of alcohol-focused charities. Diageo also played a key role in establishing social aspect organisations, such as the Portman Group, designed to guide alcohol companies and to work with governments to raise standards of marketing, social responsibility and to share and promote best practice.
Necessary goods
Most developed economy governments agree that access to credit is an essential element – and right – of modern living. However, there is an understanding that many people entitled to credit facilities are not always equipped to deal with debt and its potentially negative consequences. UK retail banks, particularly Natwest, as well as Barclays and others, supported the creation of pfeg, a charitable organisation that promotes financial literacy, enabling people to manage debt and minimise risks to consumers and lenders alike.
To address the plight of poor groups unable to afford HIV/Aids anti-retrovirals, leading pharmaceuticals companies, including Bristol Myers Squibb, GlaxoSmithKline, Merck and 14 others joined forces to form the Global Business Coalition on HIV/Aids, Tuberculosis and Malaria. The GBC has partnered with UNAIDS, and other collaborators and is largely welcomed as a force for good in tackling the ills spread by such diseases.
Charity does not equal ‘good’
Be warned, however. Critics have accused these same pharmaceutical corporations of paying charities to hold events to present new findings about medical conditions, at which only the manufacturers’ drugs are discussed. The charges of impropriety have spread beyond the corporations, tarnishing reputations of respected charities such as Cancer Research UK and The Alzheimer’s Society.
Similarly, while some efforts to promote financial literacy have been welcomed by consumer groups and the Association of British Credit Unions Limited, other banks have been accused of conducting thinly veiled marketing, rather than providing genuine education. Meanwhile, the Portman Group is condemned by some campaigners as a drinks industry lobby group, not a genuine effort to protect public health.
Responsibility and leadership
Companies that want to deal with the negative consequences of their business have to put in place numerous strategies. Industry-wide initiatives that demonstrate true leadership are important steps.
Beyond this, companies need to examine where their greatest impacts and sources of controversy lie. If the key impact is in production, focus efforts on working with engineers and contractors to develop safer, less polluting extraction or manufacturing processes. If it is about use of product, work with marketing departments and retailers to agree acceptable base-line selling principles. Communicate initiatives and commitments to affected stakeholders. Some companies will feel damned if they do and damned if they don’t. Leadership is about promoting industry-wide benchmarks and seeking to surpass them, accepting that controversy cannot be entirely eliminated. Ultimately, the words of advertising pioneer David Ogilvy hold: “If you want to be admired, do something admirable.”
Toby Kent is a senior consultant at The Corporate Citizenship Company.
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