Why is it so hard to tell people you’re being so good?
The expectation of businesses to be sustainable, charitable and ethical is higher than ever. After all, from society’s point of view, companies and organisations don’t operate in a vacuum.
While there is not legislative requirement on businesses for corporate social responsibility (CSR), society expects businesses will act in an ethical and transparent way that contributes to the health and welfare of society.
We see a lot of examples of organisations trying to implement CSR all around us. The footwear enterprise that is increasing its use of recycled and organic materials. The supermarket chain pledging to stock only free-range eggs. The beauty product manufacturer banning products tested on animals.
Researchers have found that CSR can give businesses two main benefits – a positive impact on the bottom line, and the creation of a “good will bank” or “social licence to operate” with stakeholders.
But to accrue these benefits, businesses need to properly communicate what they’re doing in CSR and that’s where many companies come undone.
One obstacle in communicating CSR to stakeholders is the Self-Promotor Paradox. This is the idea that those that communicate the most about corporate social responsibility are often those organisations with the lowest stakeholder trust and highest stakeholder criticism. Naturally, these stakeholders are therefore sceptical when these companies promote their CSR too loudly.
At its core, corporate social responsibility needs to be considered credible and authentic. It’s likely your authenticity will be questioned if you try to tell your stakeholders that the sole purpose of your goodwill is because “it’s for the good of the community”. However an action that is more honestly communicated as being both good for the community and good for the company’s profits is much more likely to be believed.
And even when a company is trying to do a good deed, that doesn’t mean it won’t face scrutiny and potential criticism. One of the key problems with CSR is that it means different things to different people. For some, it’s all about the environment, while for others it’s more about treatment of staff.
Imagine your company donates 3 cents from every sale towards a charity that teaches refugee students to read. Surely a worthy cause? But what if some stakeholders think 3 cents is not enough. Meanwhile other stakeholders think you should be helping farmers instead.
Not to mention that some organisations can be simultaneously responsible and irresponsible, such as when their CSR activities actually push the problem to others, such as suppliers.
While CSR is an issue for the whole organisation, how it is communicated can be a real sticking point.
In the next few weeks we’ll provide some expert tips on how your business can successfully incorporate and communicate corporate social responsibility.