Doing well by doing good

Today, more than 50% of the world's top 250 corporations publish an annual CSR report, and there are a number of recognised ways in which companies can show their compliance with CSR standards.

CSR has been growing as a trend around  Asia as businesses realise that "doing good" (or perhaps just trying to look good) can help to bolster reputation and long-term success.

Bill Gates swears by it. In a recent speech to the World Economic Forum in Davos, Gates laid out his vision of "creative capitalism" which encourages companies to spend money on worthwhile causes or on money-losing projects that are judged to be socially desirable.

But just how should a CSR program work and what role should it play in the marketing and advertising mix, if any?

Jean-Michel Dumont, executive vice president & managing director of Ruder Finn North Asia, has worked with some of the regions biggest corporates including BP and the Michelin tyer company to develop CSR programs in Mainland China.

"CSR actually goes beyond marketing and that is the biggest issue, that is why so few companies really have it right. It needs to be in the company's DNA, it needs to filter through every element of the organisation, usually driven by the board or the CEO that really makes sure that all the divisions are really involved," Dumont says.

"Because you touch on HR, marketing, government relations and public affairs and regulatory issues, it needs to be an umbrella strategy that really covers everything and each of these departments."

But he says one continuing problem with CSR today, is that the strategy has largely been left to the PR departments, prone to PR spin and as a result open to a consumer backlash.

"There is definitely some spin and PR done by a lot of companies, but to me this can only be short term.

"People are not stupid. If you see an oil company which clearly is not doing anything else for the environment than giving a bit of money towards a tree planting program somewhere, which is irrelevant, people are not dumb.

"Yes, it might have a short term effect, but in the long term it doesn't work," he says.

"A lot of companies look into it and see it as a touchy feely thing, but at the end of the day because it's not integrated they can't measure the impact the right way and usually in the long term they drop it.

"On the other side, you do have notable clients like BP for example, which I think is doing a lot of things genuinely. They were the first ones to acknowledge that global warming was an issue."
What some might not know about CSR today is that there is clear research that shows a good CSR program can add to a company's bottom line.

Dumont argues that the actual direct measurable financial cost of not attending to CSR is now becoming a financial burden.

"Companies with good CSR basically are less prone to issues and as such have better consistency in their share price.
"You can definitely measure CSR depending on what kind of plan you do and what you want to measure.

"Usually the aim of a CSR program is to really involve your staff and educate them and the result from this is attractiveness of the company and staff retention and cost reduction. Staff retention clearly has a financial impact.

"Usually you involve them at the beginning before you go into the CSR program so that you are addressing their needs."