Authentic Communications in the Downturn

October 16, 2008

As the global credit crunch takes its toll on the world’s financial sector, the UK economy is facing a recession with rising commodity prices, negative growth and increasing unemployment.

Beyond the direct economic impact of this turbulence it is important to recognise the psychological impact of today’s tougher economic climate. Faced with falling consumer confidence many businesses are uncertain how to react. One area that is coming under increased scrutiny is the way companies communicate about their corporate responsibilities. All too often, communication in this area is poorly thought through, poorly executed and delivers little value.

In a time of economic uncertainty the need to communicate effectively becomes more urgent than ever. The secret to success is authenticity – in doing what you say and in saying what you do.

Doing what you say obviously involves living up to your values on social and environmental commitments. Concern for the environment makes business sense in a tough economic climate as energy efficiency becomes vital for every business. And, with rising commodity prices, smart businesses are concerned about reducing their use of raw materials, recycling and cutting waste.

On social issues, living by your values is imperative. Companies cannot ignore the pressures they face to behave in a responsible way. Earlier this year Primark was accused by the BBC of using child labour in factories in India. Tesco also faced accusations from War on Want that workers in Bangalore were producing clothes at half the living wage.

Such allegations cause real damage to brand image, even among retailers aimed at the value end of the price spectrum. The idea that shoppers on tight budgets are not concerned with ethical issues is both patronising and wrong. There is strong evidence to show that social and environmental issues impinge on consumer behaviour across the board.

People want to know how you are responding to these issues, which brings us to the other element of success – saying what you do.
It is clear than many companies are still struggling in this area. Last year, the Advertising Standards Agency (ASA) saw a five fold increase in complaints about adverts making claims for the sustainable credentials of a wide range of products and services – some of the high profile brands that were censured included Shell, Suzuki, Ryanair and Toyota.

While advertising is only one aspect of communications, the costs of getting it wrong are huge. Who would want to be the agency executive that has to explain to the client why the latest “green ad” has been pulled by the ASA? So, what are the key things to think about in communicating responsible business behaviour?

1. Be yourself. Don’t be afraid to celebrate who you are and what you do. Remember that first and foremost you are a business – so talk about the wealth you create and the benefits you bring to society through your core activities.

2. People want to hear about their concerns as well as your activities. Stakeholders don’t necessarily need to know about your ten-point plan for sustainability, but they are interested in how you can help them reduce energy consumption. You have to respect the point of view of your stakeholders and talk about the issues that interest them.

3. A little humility goes a long way. While it is nice to talk about your achievements, this must be balanced with discussion of the bad news, the challenges and the unsolved issues.

4. Remember the power of digital communications. Those responsible for spreading the word about corporate responsibility have been relatively slow to adopt on-line channels. While there are some really innovative examples – BT, Centrica and Timberland spring to mind – most companies could make digital work harder for them.

Without doubt the state of the economy does have an effect on peoples’ behaviour, but this will always be a short-term trend. More profound decisions about which company to work for, invest in or buy from are influenced by deeper, more complex criteria. Authentic communications have a much greater chance of influencing these preferences rather than economic imperatives.

Andrew is MD of Corporate Citizenship. In addition to client assignments, Andrew has responsibility for strengthening the research and publications undertaken by the company, both in the UK and internationally.
Prior to joining Corporate Citizenship, Andrew was director of the Centre for Business and Society at Ashridge – the international business school. He has worked with senior managers in a range of multinational companies helping them to develop a strategic approach to corporate citizenship and sustainable development. Recent clients include, Johnson & Johnson, Novartis, Cemex and IBM. Andrew has also acted as an adviser on corporate social responsibility to the European Commission, and to the British, German and Danish governments.
Recently, Andrew has been working with the Vodafone UK Foundation and a group of leading charities exploring methods for measuring their Social Return on Investment. He also has extensive experience in social reporting and in the past has verified the reports of United Utilities, Camelot and British Land among others