When CSR goes wrong by Sangeeta Waldron

When companies feign interest in company responsibility to improve their bottom line, it is known as greenwashing; a term that was coined in the 1980s to describe shameful corporate environmental claims. It has since become a familiar term for companies pretending to be interested in Corporate Social Responsibility (CSR) to improve their bottom line. We know that people like to support companies that are socially conscious, so when a corporation greenwashes they’re setting themselves up for failure. Feigning interest in social responsibility can have short-term benefits, but if — or rather, ‘when’ — you’re discovered, it can have a lasting negative impact on your reputation.

Now in the age of the internet, it’s much harder to hide errors and controversy, and so many companies have built their mission around the idea of making the world better.

THE BRAND’S WHO HAVE SUFFERED

We’ve all heard of Nike’s hurdles involving sweatshops and not paying their workers properly in the ‘90s. Or, the Nestlé baby milk scandal, where the brand targeted the poor in discouraging breastfeeding and aggressively pushing its baby formula in less economically-developed countries. Nestlé made it seem that their infant formula was almost as good as a mother’s milk, which is unethical for many reasons. The two brands have never been able to shake off these negative stories, which pop up from time to time despite the good things they may have done since then.

A recent example, is the online apparel retailer Boohoo generated negative PR in the summer of 2020 with allegations that factories in the UK that supply the brand were guilty of worker exploitation. They allegedly payed their staff below the minimum wage and failed to provide proper protection during the COVID-19 outbreak. Following these allegations, which led to major investors severing ties with the brand, Boohoo ordered a full independent review of its supply chain, promising to terminate relationships with any suppliers found to be non-compliant with the brand’s code of conduct. While a positive move, the company suffered significant damage to its share price and brand reputation that could have been avoided.

Another example was Burger King’s special offering for ‘Veganuary,’ the movement to promote a vegan lifestyle for the month of January. Burger King marked the occasion by launching a plant-based hamburger, but its soya-based burger was being cooked on the same grill as the meat burgers, and couldn’t be eaten by vegans. The story was picked up by the press and railed against on social media. The fast-food chain responded by saying that the burger was “for flexitarians and designed for people who want to cut down on their meat consumption, not cut out meat completely.” Using an awareness month as a hook to launch a product that isn’t actually suitable for your audience is just spin.

Actions that embody cultural intelligence and awareness are necessary when tackling any campaign strategy. Brands need to voice an understanding of the damage they can cause — and commit to doing otherwise —rather than try to justify their actions.

In the global marketplace, and the culture at large, audience is power. Consequently, keeping companies accountable for the way they use that power is increasingly in the hands of consumers. And this, inevitably, helps sculpt the relationship between companies and customers.

Volkswagen provides a textbook example. VW’s green initiative helped it become the world’s leading car manufacturer, as people were convinced that its environmental standards were unmatched. Except, we were to learn, they weren’t. As was widely reported, Volkswagen’s cars weren’t green at all. Instead, they were emitting pollutants well above the statutory limits and lying about it.

THE SOLUTION

The path to overcoming greenwashing is to be authentic. Don’t claim to care about something you don’t care about. As we have read here, companies have a history of manipulating the public by claiming that they are leaders in an issue that people care about.

Don’t forget to look at your business core values; these are values that you really care about and that you build your company around them. If you can’t be authentic about social initiatives, choose not to engage in them. Volkswagen is learning the price of greenwashing the hard way – in millions of dollars lost and a ruined reputation.

In a move to be eco-friendlier, do you remember when McDonald’s announced it would cut plastic straws from its locations in the UK and Ireland, replacing them with a paper alternative? The fast food chain uses 1.8 million straws a day in the UK, so they touted the initiative as a significant step in helping to reduce single-use plastic. But there was a problem; where the old plastic straws could be recycled, the new paper ones couldn’t be! Customers were told to put them in the general waste.

The lesson here is to do your research, take time to consider whether the CSR initiative is practical and doable. Don’t jump on the bandwagon to look cool or be on trend; it has to be authentic and achievable. You want your CSR to be leave the right legacy.