Is confusion over the terminology holding back both the understanding and acceptance of sustainability/corporate social responsibility (CSR)? Is this confusion further impeding effective implementation? Does it hinder the appropriate organizational response in terms of structure and responsibility? Can it inhibit finding the right external source of advice and support?
The confusion over terminology will be a familiar one to marketing practitioners, used to widespread misunderstanding over their profession. Marketing is seen as encompassing everything from being the strategic thrust of an organization (e.g. Procter & Gamble) through the promotion of individual brands (e.g. via advertising campaigns), the physical distribution of products (e.g. agricultural produce such as wool) to tactical sales promotions (e.g. 2 for 1 offers).
Just as with marketing, the existence of very different interpretations of the sustainability/CSR discipline’s meaning will lead to a wide variety of strategic and executional responses. The uneasy conjunction of sustainability and CSR has come about in part because of their different origins.
CSR has its beginnings in the growing requirement for organizations in the 1970s and 1980s to ensure compliance with legislation concerning the environment. This also acquired a philanthropic aspect by the ’80s, with for instance, Business in the Community encouraging companies to give 1% of their profits to good causes with the Per Cent Club. As pressure from NGOs on environmental and social issues increased in the 1990s, companies began establishing CSR departments, with the preparation of reports on their progress a primary function.
However, CSR approached from this angle has often remained reactive, defensive, tactical, incremental in nature, isolated from the operating units and concerned primarily with compliance and reputation. Michael Porter and Mark Kramer described it thus: “…oftentimes a hodgepodge of uncoordinated CSR and philanthropic activities disconnected from the company’s strategy that neither make any meaningful social impact nor strengthen the firm’s long-term competitiveness”.
CSR, reflecting its title, also often concentrates on the social element of sustainability, with environmental aspects being handled by another function (sometimes titled ‘Sustainability’). For a while CSR began to be abbreviated to corporate responsibility (CR) to more readily incorporate other aspects, but this move appears to have stalled, adding further confusion. Additionally however, CSR may sometimes be used interchangeably with sustainability as a term describing a strategic approach encompassing all the elements of the Triple Bottom Line (devised by John Elkington) – social, environmental and economic (or people, planet and profits).
Sustainability has had a rather different journey, beginning with the famous definition of sustainable development from the Bruntland Report in 1987: “Sustainable development seeks to meet the needs and aspirations of the present without compromising the ability to meet those of the future“. This introduced the concept of future generations being a key stakeholder for consideration in organizations’ strategic planning.
This more visionary and strategic philosophy, encouraged by leading NGOs such as Forum for the Future, has been adopted by a growing number of major corporations, sometimes as a result of a CEO’s epiphany moment. It takes its start-point as seeing sustainability being about defining the business, rather than just protecting it; exemplars include Marks & Spencer, GE and Unilever. It sees sustainability as being embedded into the top line of revenue growth, rather than just the bottom line of cost reduction.
Thus we are seeing a gradual progression from one concept of CSR to another, whether or not the name it is given changes during the process:
As Mike Barry and Lucy Calver of Marks & Spencer have said “Many global businesses, including Nike, Unilever and Google, have recognised that the days of corporate social responsibility (CSR) are over”. A recent MITSloan article reports that 30% of leading ‘Harvester’ companies either already have, or are planning to create, a Chief Sustainability Officer (CSO) post. This compares to 13% for other organizations.
The realisation that sustainability is a business driver, rather than being a peripheral function, has repercussions for every part of the organization – not least marketing. As well as fulfilling environmental and social objectives, and meeting its obligations to all its stakeholders, a company has to compete successfully. For it to do this, the business must identify new sources of competitive advantage, using its sustainability initiatives to innovate and meet customer aspirations, wants and needs. Without the sustainability element this is a classic job description of a strategic marketer’s role; with the sustainability element it describes an even more demanding but pivotal and fulfilling role. If marketers can step up to the plate.