26 May 2015 – I was at a mid-week afternoon business conference on conservation, and the air in the designated ballroom was stuffy. An overburdened microphone cracked frequently as a line-up of CSR/sustainability leaders presented their firms’ programs to a crowd of peers. Glassy-eyed audience members stared at the stage, gazed into space and checked occasional e-mails.
This was a crowd of believers. They know well the harm that, unchecked, businesses may have on the environment, on communities and on laborers. Why wouldn’t they be stimulated by Company A’s efforts to minimize water consumption or Company B’s concern for an endangered marine mammal? Most of what I heard that day was good – too good.
In fact, there was no bad news. Not one speaker described internal implementation challenges. All firms were proactive, and shareholders were on board. No embarrassments clouded any firm’s efforts. Over several hours, the word “reputation” was uttered just once in passing, as if it were not an important determinant of CSR/sustainability strategy. And both the planet and local stakeholders benefited. What was not to like?
Yet, as CSR/sustainability managers know, it is not always easy to steer the corporate ship toward sustainable operations. For instance, a manager from a state-invested enterprise recently told me that he feared his superiors would object to the acknowledgement of community concerns through one politely rebutted video clip of an unhappy stakeholder in the firm’s latest sustainability report.
Then there was the distressed executive in the communications office of a Hong Kong conglomerate, who complained that she had to promote the company’s philanthropic largesse and strides in upgrading polluting industrial equipment while facing allegations of labor force mistreatment. Such examples are all-too-common in large and diverse enterprises.
There is no reason to obligate CSR/sustainability managers to always air dirty laundry. Nor are all backroom implementation challenges worth reporting on. But such examples suggest that it may be time for companies to change the way they talk about CSR/sustainability publicly.
Dose of Realism
First of all, discussion needs to be less aspirational and more realistic. Communicating lofty goals, such as zero-impact operations, may raise a firm’s internal feel-good factor in the short term, but it might ultimately yield disappointment among listeners unless they have an appreciation for the hurdles. Technical factors aside, the greatest hurdle is internal dissent.
Legally, a company is a collective. The individuals that make up that collective have their own identities and, oftentimes, radically different value systems. This makes it difficult to build consensus on many issues. But there is one thing that most people in for-profit companies typically agree on – the need for good returns.
This is why, beyond any statutory requirements in the jurisdictions of operation, firms should choose CSR/sustainability activities that minimize costs, raise productive efficiency, or produce valuable byproducts. These are good for the business, and their legitimacy is less likely to be questioned by external observers. That they usually come with reduced resource usage and frequently lead to less impact on local communities is an added benefit.
The same rationale applies to product safety, labor relations, or any other subfield that falls within the CSR/sustainability basket. Who would deny that, in many contexts, investing in supply-chain transparency or better materials may lead to greater returns in the long run through reduced reputation or litigation costs?
This said, internal stakeholders may not be willing to sacrifice short-term gain for long-term benefits, or to act sooner rather than later. Even if those stakeholders concur that something must be done, they do not always agree on the means to the end. And agreement on the means does not guarantee agreement on the messaging.
Complicating the matter is decades of debate over the extent of a firm’s “social responsibility”, or whether such responsibility exists at all. Walmart Foundation President Kathleen McLaughlin seems to think it does.
“We believe business exists to serve society,” she is quoted in the press release that accompanies Walmart’s 2015 Global Responsibility Report. “Our commitment to global responsibility goes beyond philanthropy – it is a whole company undertaking that is woven into our day-to-day business activities, creating value for business and society.”
McLaughlin’s senior role may give her influence over messaging, but it does not necessarily reflect the value systems of the individuals that compose Walmart’s 2.2 million-strong multinational workforce, not to mention those of the employees within the company’s extensive supplier network.
When messengers focus too much on the aspirational outcome (create value for business and society), they often unintentionally blind listeners to worthy achievements in the process (the struggle to adapt global operations to a centrally determined value system). Under such circumstances, why shouldn’t Walmart’s customers be disappointed when the occasional negative story undermines the chosen message?
Smash the Monolith
In corporate communications, revelation of internal disagreements and other challenges, again outside of statutory requirements, is relatively rare. This should not be the case for CSR/sustainability communications for a simple reason.
Those impacted by the financial health of an enterprise are more likely to be limited to investors, internal stakeholders and business partners. However, entire communities experience the negative externalities of operations, often whether they are willing or not. Companies cannot expect external stakeholders to passively shoulder information asymmetry when there is no buy-in.
In fact, consistent but measured transparency with respect to internal challenges can yield reputational dividends when it comes to CSR/sustainability communications, provided plans to overcome those issues are under implementation. This openness adds flesh to the cold “legal person” of the company, imparting some humanity. And it is the humanity of big business that so many community stakeholders find lacking.
The Mystery Audience
With these points in mind, I return to the mystery of the unenthused audience. Why wouldn’t that crowd of CSR/sustainability sympathizers show more interest in their peers’ presentations?
Simply put, those attendees knew the rules of the game. They know that internal challenges beset enterprises that implement CSR/sustainability plans. They also know that messaging does not always reflect on-the-ground realities. They were being politely tolerant of the speakers, all of whom were fundamentally credible but none of whom bothered to engage the audience in a practical discussion of the real issues they confront.
So the applause was not hearty. Like most conference attendees, these listeners desired new insights. They got corporate mouthpieces instead.