Wednesday, 23 September 2015
If ever proof was needed of the importance of CSR then the Volkswagen dodgy emissions is that. 30% wiped off the share price in two days, the CEO resigns and $7BN set aside for the fines. And no news as yet on whether all 11M vehicles will need to be recalled. Or lawsuits for allowing increased pollution. And all this from one of the world's biggest carmakers and most reputable brands.
Wednesday, 16 September 2015
Dear Luke I wanted to write to you having read your CSR article in the Sunday Times. I enjoyed your previous articles of the last few months on the advertising industry and the role of big business etc. But your CSR article is way off beam in terms of its relevance to a modern economy. Sure a company director’s duty is to maximise profit as you say – but surely not in the 21st century at the expense of incurring costs to the environment , staff and customer loyalty and ultimately being legislated out of business? And although generating vast wealth for humanity, the failure of capitalism so far is producing that wealth at the expense of the environment. And optimise profits? For spurious takeover deals? Or salting away in tax havens? Or funding the excesses of government waste? Instead, why not maximise profits with CSR for the benefit of the long-term growth of the business? Directors of slave industry and sugar companies were no doubt keen to maximise profit for their businesses for as long as possible before the consumer and government backlash. The Living Wage to their employees then amounted to little more than being lucky to be alive and enslaved. Thankfully business has moved on since then in many parts of the world. Although the day before your article BBCTV highlighted the tea plantations of major brands such as Liptons, PG Tips, Typhoo etc with their workers living in hovels and defecating around the tea bushes for lack of the –legally required – houses and toilets. CSR in this instance would mean something more palatable in your teacup. While CocaCola in the Sunday Times the same day as your article, took 2 pages of advertising to highlight its moves towards sugar-free drinks across all its brands. Just as in years gone by, it did actually remove cocaine from Coca-Cola amidst customer and government – and competitor - pressure. Rather CSR spurs a forward-thinking brand and company like CocaCola to be more innovative and creative and market-focused. And in your restaurant brands I’m sure there are CSR discussions about the distribution and costs of tips amongst staff, along with concerns over food waste or recycling cooking oil or sustainable farming. In all the above instances not to undertake such CSR activity could maximise profit – but only in the short term. And why would you think CSR or HR are dependent organisms of a business any more than say Venture Capital firms or the staff canteen or the finance dept? The cost in share price and customer and trade loyalty are noticeable – hence the numerous research studies that demonstrate that – I won’t bore you with them here but happy to provide more info if you need it eg TOMS One For One shoes with 45M pairs of shoes sold and donated. Is CSR perfect? Of course not – certainly it would be wasteful to simply pay lip service to values or courses of action – as the tea companies as above will no doubt see over the next few months. CSR doesn’t detract from profits, except perhaps in the short-term sometimes, but rather it is a catalyst to maximising the value and meaning of a brand - which is the longterm view of a business if done well. I look forward to your next Sunday Times article as always. Kindest regards Tim PS I'd forgot to add that a Living Wage isn't really CSR as such more just governance of business along with say fire extinguishers in offices etc. And if CSR is so terrible then why are Trotskyist radicals like Accenture or Bloomberg's New York recommending minimum wage improvements or junk food taxes etc?