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CSR: good business, or PR ploy?
Is corporate social responsibility just about the giant, camera-friendly donation cheques? Or is it a solid business proposition? Gulf Marketing Review investigates.
March 30, 2010 12:01 by Farrukh Naeem
It’s almost fashionable to talk about CSR in the corporate world.
Company websites have dedicated corporate social responsibility sections; press releases are issued with pictures of CEOs holding giant donation cheques. But the scope of CSR goes beyond more than just charity, donations to development organizations or seasonal awareness campaigns.
Today, as companies struggle to come to terms with harsh economic realities, questions are being raised on whether there is any good in doing good, business-wise.
There is ample evidence that no matter the state of the economy, investment in CSR is a necessity – and an opportunity. In a study conducted by YouGov Siraj on behalf of National Commercial Bank of Saudi Arabia, more than half the respondents (56 per cent) felt that CSR attracts new investors and another 62 per cent believed that CSR facilitates the development of a stronger relationship with the organization.
The 2009 Edelman goodpurpose Consumer Study, which surveyed 6,000 consumers in 10 countries, revealed that 57 per cent of consumers chose a brand or company because of its CSR initiatives. If the quality of a product or service is the same, more than 65 per cent would readily switch to a brand that supports a good cause.
In their latest book, Guerrilla Marketing Goes Green: Winning Strategies to Improve Your Profits and Your Planet, Jay Conrad Levinson, originator of guerrilla marketing, and award-winning marketing author and lifelong environmental activist Shel Horowitz stress that CSR, sustainability and profitability can go hand in hand.
“Not only is it a good value proposition, but those companies that ignore CSR will find themselves increasingly marginalized as more and more consumers start to really demand it,” Horowitz says. Ethical companies can slash marketing costs and boost response by forming alliances with organizations that reach their target audience, by turning customers and even competitors into brand ambassadors.
While one would think that recessions diminish the CSR effect, it’s quite the contrary. In 2009, according to the Edelman study, 64 per cent of global respondents said they would recommend a brand that supports a good cause, up from 52 per cent in 2008. The need to be an ethical and responsible company today is greater than ever.
Redefining social responsibility
In a region known for its predisposition to philanthropy at an individual, corporate and government level, it’s not hard to find numerous examples of community support through financial aid.
Especially during Ramadan, the traditional month of giving, all entities big and small do their part for the community, often without publicity, as is the Islamic tradition. But there’s more to CSR – and things are changing fast towards the global norms.
CSR in the region is moving in many instances from ad hoc activities driven by individual company founders, to a strategically aligned, competency-based activity framed by the company’s overall corporate responsibility strategy, according to Maria Sillanpaa, founding director of the Sustainability Advisory Group.