The Economic Case for Corporate Social Responsibility
What's good for the world is good for business.
What's good for the world is good for business.
Over the past month, I’ve had numerous discussions with clients across industries about whether and how to take action during the #BlackLivesMatter protests. But from the start, I’ve realized that my own position on the matter was rooted in an emotional response rather than a data-driven one:
If you are going to do anything, do it from the heart, and do it continuously and sustainably. A single post asserting your support isn't enough.
I’ve found myself delivering that same message over and over—not because I’ve had the numbers to prove that sustained, sincere engagement is the most profitable approach to Corporate Social Responsibility, but because I’ve felt it to be the most moral course of action. Don’t capitalize. Contribute.
As a black man, I lead a life inflected by the issues these protests have surfaced. And so while my job requires that I advise our clients to take the most profitable course, I have found myself wanting them to get involved for other reasons as well: because I want to see my country become a more equitable place, and because I believe in the combined power of business to steward this change.
But while our clients have felt the same way, At P3, we measure our actions by the economic results they produce. So I asked our research team to dig into the data, and determine whether there is any economic evidence to support the idea that helping your community is good business.
As it turns out (and to my great relief), the answer is a resounding YES. High-purpose companies whose business models call for sustained action on social issues:
• make more money
• create more loyal customers
• and have seen over twice the growth of low-purpose brands over the last decade.
What’s more, millennials and centennials are driving the growth of purpose-led brands, and we expect the trends outlined in this piece to become even more pronounced as both groups grow in spending power over the long term.
These findings are ultimately the reason we encourage you to think seriously about your own Corporate Social Responsibility program, and to consider integrating the principles and ideas below into the DNA of your company. It's not just the right thing to do. It's also the profitable thing to do.
And that means it’s good for all of us.
The killing of George Floyd by former police officer Derek Chauvin in Minneapolis on Memorial Day, 2020 sparked a revolutionary outcry in the U.S. and abroad. And as citizens spilled into the streets, many businesses followed, posting a range of responses and vowing various degrees of action.
Some contributions were strong.
Some were wrong.
And some businesses just told on themselves.
This is not a piece about the NBA, but since we’re laying out how and when your business should use its platform to advance social issues, James Dolan’s recent decision making provides us with a powerful object lesson in how the tenets of Corporate Social Responsibility (CSR) have changed over the past few decades, and it’s worth taking a moment to unpack in full.
If you squint, Dolan issuing a company-wide omertà on a sensitive social issue might seem prudent. After all, old-guard business wisdom holds that it’s not profitable to become embroiled in social issues, when no matter what you say, you’re bound to piss someone off.
In the case of George Floyd’s death and the wave of protests that have followed, there are plenty of other high-profile businesses that have refrained from issuing statements for this same reason. And, lest we forget, it’s been a scant 9 months since Houston Rockets GM, Daryl Morey accidentally jeopardized the revenue of the entire league with a stroke of his thumb:
Morey’s tweet incensed the Chinese government, which halted national broadcasts of NBA games and threatened to cut ties with the league entirely. Experts estimate that the response to Morey’s post cost the league somewhere between $200 and $500 million, and to most NBA owners, the economic lesson from the debacle seemed clear:
Don’t use your professional platform to undermine the interests of those with whom you do business.
But so the question: With whom do the Knicks do business? The majority of the team’s most visible employees are black. Players suit up in an arena nicknamed The Mecca, and are constituents of a league that’s brimming with black athletes who use their platforms as activists and philanthropists. The organization represents one of the most diverse cities on the planet, and the team’s most visible fan is Spike Lee, a black artist who spent his entire career documenting the agon between police and the communities they are meant to serve.
Whether Dolan sees it or not, black folks are the bedrock of the Knicks organization. And that is what makes the Knicks’ enforced silence so appalling to so many. By not taking an official stance, the Knicks have actively undermined the interests of those with whom they do business. Indeed, they’ve undermined the interests of the very people on whose business they rely.
You may draw your own conclusions as to why, but the backlash against Dolan demonstrates that if there is a real lesson about CSR to draw from this moment, it’s this:
Corporations are seen as members of the communities they draw from. And in 2020, consumers expect them to act that way.
That isn’t to suggest that your business has a duty to support any particular movement or cause. Perhaps your stakeholders really care about breast cancer research, or saving the planet, or re-funding music programs in Philadelphia’s public schools. Whatever social objective they champion though, the data on your customers’ attitudes is consistent and clear: They want you to support the issues they care about.
Moreover, research shows that the more seriously you take your opportunity to engage customers over social issues, the more profitable your business stands to become over the long term.
Here’s metadata from three recent independent studies that each asked American consumers whether they wanted brands to take a stand on important social issues:
That’s a lot of people who want to hear from you! And according to research from Kantar Consulting, this desire is most widespread among millennials, who now have more buying power than any other generation, and among members of Gen Z, who will be running the world in a decade unless we all get on Tik Tok right away and figure out what the heck they’re up to.
Specifically, Kantar reports that just under two-thirds of millennials and centennials express a preference for brands that ‘have a point of view and stand for something.’ Consider this preference alongside recent research from Clutch which found that “75% of Americans are likely to start shopping with a brand that supports an issue they agree with,” and the importance of strategic CSR programs to long-term growth starts to become clear. But just how important is CSR to the future of your brand?
2. Brands That Consistently Engage Customers On Social Issues Do WAAAAY Better Over The Long Term
In 1970, the economist Milton Friedman penned a now famous editorial for the New York Times Magazine entitled, “The Social Responsibility of Business is to Increase its Profits.” Excuse us while we find the right GI—oh here it is.
Friedman’s reasoning was that when businesses spend money on CSR initiatives, they’re hurting business efficiency and betraying their stakeholders by reallocating resources that would have gone to R&D or other “profitable” uses. Since then, business owners seduced by this zero-sum logic have pointed to Friedman again and again when explaining why they can’t go green. Can’t hire inclusively. Can’t do more.
The thing is, all of the best research says that Dr. Friedman was dead wrong. In fact, according to Harvard Business professor Michael Porter and his research partners, when we adopt any view longer than the immediate term, there is no inherent tradeoff between philanthropy and profitability.
“The deeper work, the new work, the new thinking, on the interface between business and social problems is actually showing that there is a fundamental, deep synergy, particularly if you’re not thinking in the very short run. In the very short run, you can fool yourself into thinking that there’s fundamentally opposing goals, but in the long run, ultimately, we’re learning in field after field that this is simply not true.”
-Dr. Michael Porter
Here is Dr. Porter in 2013, delivering his stump speech on “Shared Value” at an actual TED Talk (not like, TEDx Saskatoon). Perhaps you’re one of the few million people who have already seen it.
Dr. Porter was a few years ahead of the curve in suggesting that businesses have an opportunity (in the economic sense) to carve out larger roles in the contribution to social welfare. But while he restricted his focus to the tenets of “shared value,” which he defines as “addressing a social issue with a business model,” in the years since, research on so-called ‘purpose-driven’ brands, which include both brands that use shared value models and brands that simply champion social issues relevant to their business, has made this abundantly clear.
When Kantar crunched the numbers for their groundbreaking Purpose 2020 White Paper, they found that “brands with a high sense of purpose have seen their brand valuation increase by 175% over past 12 years vs a median growth rate of 86% and a growth rate of 70% for brands with a low sense of purpose.” It’s ok to read that over. Over the past decade plus, high purpose brands have grown a full 2.5X faster than brands with a low sense of purpose.
Why? Because these brands tend to be very good at keeping their customers engaged:
Is it just us, or is TOMs also announcing that they just sold 300,000 units in 24 hours? Milton Friedman, with his aggressively boring prose, could never have predicted that investing in customer engagement could produce such results.
And here’s the kicker: we’ve known for quite a while that maintaining a high level of emotional engagement with your customers is good for your bottom line in all sorts of ways. As far back as 2010, Gallup analyzed over a decade’s worth of data and concluded that, “companies that generate ‘fully engaged,’ emotionally connected customers sell more, make more money, and are better able to withstand the stress of economic downturns.”
Yup. With the ability to tap into more loyal, more motivated customer bases, socially invested brands out-earn their competitors in both fat times and lean. That’s why you see so many brands jumping onto the empowerment train. That’s why every company has a social team, or at least a very social niece, pumping out empathic content. And that’s why you should be asking yourself the next logical question: How your business can get on board.
Next, we’ll cover how you can easily identify the issues your community cares about, and the major do’s and don’ts of engaging your audience on sensitive topics in more authentic, more meaningful, and ultimately more profitable ways.
You probably already have a sense of which larger issues your company might plug into to make a difference. But if you want to make a comprehensive formal assessment, there are 5 common-sense dimensions you can use to zero in on the sorts of causes and issues that are a natural fit for your organization:
Is there an issue that your customers are especially passionate about? If so, that’s the likeliest place to begin thinking about how you can have an impact. Google Analytics can tell you a ton about your audience members’ interests, and you can also poll your customers individually using tools like Typeform, which P3 uses all the time to set up online post-purchase surveys for our clients. If your customers all share a particular affinity, you can also learn a good deal about their values by visiting the places online where they go to share with and learn from one another, like forums and chat groups. Issues that your customers surface directly among themselves are likely to point toward impactful interventions that could directly improve their lives. And when you can improve your customers’ lives, everyone wins.
For instance, recently we were asked to gain audience insight for one of our active womenswear brands focused on club sports. By visiting the public-facing forums where their customers go to discuss sports, we found that the #1 challenge faced by this group of amateur athletes is how to secure reasonable league time on golf courses and tennis courts.
For the brand in question, investing in an initiative to secure women equitable access to these facilities would represent a strong natural alignment between corporate and customer values. And conducting a successful equal access initiative would result both in a meaningful improvement to the lives of the brand’s stakeholders, and a new wellspring of brand affinity among the members of its target audience.
Over the long term, it also stands to reason that an athletics brand whose customers have more opportunities to play (and thus more matches to dress for), can expect to see higher lifetime value from each of its fans. This is the power of understanding your stakeholders’ values and finding genuine ways to align with them.
Your employees are your largest group of ambassadors after your customers (we hope), and if you’ve read Setting The Table by uber-restauranteur Danny Meyer, you know they’re also your most important. As Danny points out, your business is your employees. And if you intend to fully capitalize on your organization’s growth potential, your first priority should be finding ways to help your team members self-actualize through their work.
Yes, this means providing fair benefits, skill building opportunities, and positive mentorship. But it also means listening to your work peers, and finding ways to ensure that the impact of your teammates’ efforts is closely aligned with the values they express. Our work feels more worthy and fulfilling when it positively corresponds with our beliefs. And when our work fulfills us, we tend to pursue it with passion and focus.
But making your employees happy isn’t the only reason to invite their participation in your CSR efforts. Your employees also create an indelible, tangible link between your business and your community. While they work for you, they live out there. And that often leads them to develop valuable insights as to how your business might better contribute to the daily life of your town, city, or core constituency.
For both of these reasons, surveying your employees on the social issues they care about related to your business, and creating formal opportunities for your team to be involved in the creation of your CSR program, are among the best ways to generate powerful ideas and sustained buy-in.
Remember, you hired your employees to enrich your company with their skills and perspectives, and they came to work for you because they believe in your mission. Leverage. That. Synergy.
Does your mission statement point to an obvious intervention? A simple, a priori way to identify the kind of initiative you might want to foster is to ask yourself and your team: How would you attend your company’s mission from a service standpoint rather than a profit-driven standpoint?
The great news here is that if you perform this exercise thoughtfully, you may not need to develop a CSR program from scratch. Chances are, there are already a number of amazing community organizations out there doing parallel work to yours, and that could use your support. For instance, say you run a wellness brand that seeks to “ensure that everyone has the proper nutrition to lead happier, healthier lives.” Because your mission statement contains the idea that everyone deserves to lead a healthier life, it could make sense to address your mission on the service side by linking up with an organization like Feeding America, which provides meals for food insecure children across the US. Or, if your business is local, you might choose to focus on your immediate community by hooking up with an area food bank.
4. Products & Services
Do your products or services naturally lend themselves to a specific cause or issue? The answer is probably more than you think. SeaVees, One of P3’s long-standing clients, makes classic footwear inspired by the west coast surf culture of the 1950’s and 60’s. Their marketing collateral stresses the joie de vivre of the California lifestyle, and they draw a large proportion of millennial shoppers, who overwhelmingly identify environmental justice as the planet’s most pressing issue. So when SeaVees sat down to think about how to set up a meaningful CSR program that would generate buy-in from their audience, the data told them that they could speak most authentically and powerfully on behalf of the earth itself.
Ultimately they signed on with 1% For the Planet, an organization that collects 1% of gross sales from participating companies and redistributes these funds to highly vetted local organizations doing critical environmental work around the world. Now the company proudly announces that every time you buy a pair of SeaVees, you’re helping to preserve the health and longevity of the planet. In their own words:
“Born and bred on the west coast of the United States in 1964, our brand embodies the California dream, and we are committed to preserving that dream for generations to come. As a growing and thriving business, we take accountability for the world around us and want to inspire change.”
We’re buying it. And customers are buying too. Since announcing their CSR program in February 2015, SeaVees has grown its ecommerce business an average of 75% YOY, well above the average growth rate Kantar established for ‘high purpose’ brands in their Purpose report.
While members of the c-suite may use their social platforms as individuals, audiences will tend to conflate a CEO’s position with her business’s position and vice versa (see Daryl Morey’s “Stand with Hong Kong” tweet). That’s why most of the time, it pays to treat your microphone as an extension of your business and its values.
The exception to this rule is when business leaders use their platforms to get ahead of their organizations’ stated positions and call for a sea change, especially of the internal variety. In these cases, audiences tend to perceive executives as steering the company, rather than representing it. In other words, don’t be afraid to put your thumb on the scales if you feel passionately that your company can do better or do more to contribute to the public good. But before you act, make sure you’re prepared to back up your words with actions. More on how to do that in the next section.
We’ve covered this step in detail above, but it bears repeating. Your CSR efforts will be most credible (and therefore generate the most positive engagement), when they relate closely to your brand’s ethos, practices, or mission. If you’re thinking about initiating a CSR program for the first time, do your due diligence before selecting a cause or partner organization. Research your customers’ interests and desires, talk to your employees, consider your core products and mission. Then get to work.
By all means, if a moment is taking shape outside that you know your brand should weigh in on, send that supportive tweet without delay. Just make sure that isn’t the extent of what you’re prepared to do. In a recent interview with Forbes, MaryLeigh Bliss, VP and editor-in-chief at YPulse, laid out why:
“in terms of CSR, it's key for brands to take direct, clear action to support the causes that they say they support: 93% of 18-36-year-olds agree, ‘If a brand voices their support of a social issue, they should also be making an active effort to help the cause.’”
And while YPulse hasn’t furnished stats on members of more established generations (they study millennials and centennials), it’s safe to assume that this is true for the majority of Americans regardless of age. If you’ve invested an appropriate amount of time thinking about your brand’s alignment, this won’t be a problem. You’ll know in advance which issues your company is prepared to speak on, and will be positioned to swiftly back up your words with action. We’ll cover some great strategies for syncing powerful words with credible actions in the next section of this guide.
According to a comprehensive study from Sprout Social, 10% or less of your messaging on social media should focus explicitly on your CSR program, with the sweet spot hovering at around 5% according to most polled consumers. That’s around 1 in 20 posts, which for most brands is totally doable, especially if you’ve already set up a credible CSR or shared value initiative to report on. As a component of your owned content potpourri, socially conscious posting boosts positive engagement and keeps you top of mind among customers who tend to vote with their dollars, an especially commonplace practice among consumers of the “change” generation.
The caveat here, as we’ve already stressed ad nauseum, is that you’ll quickly turn positive engagement into negative engagement if you decide to pursue a continuous posting strategy without mapping relevant, tangible, visible actions for your brand to take in parallel. You probably understood as much instinctively before digging into this piece, which is why we should take this moment to focus on a less obvious corollary:
You’ll gain less trust and goodwill from consumers from an isolated, over-the-top public action than you will from integrating an ongoing CSR effort into the fabric of your business and its communications strategy.
Remember when The Home Depot pledged $1 million to the Lawyers’ Committee for Civil Rights Under Law in the wake of June’s BLM protests? In a few months, most people won’t recall the number. In a year, most people probably won’t recall whether it happened at all. That’s mainly due to two factors:
1. $1 million isn’t much for Home Depot.
We as an audience innately assume that $1 million is a drop in the ocean of Home Depot’s profits, while also understanding that $1 million is not enough money to move the needle for even one civil rights organization on its own. Is it a generous figure? Absolutely. Will the money pay for important advocacy work that might otherwise not have been undertaken? Almost certainly. Are we happy that Home Depot cut the check? YES. 1,000%. CHEF’S KISS.
But from the outside, these sorts of donations can be viewed with skepticism and even cynicism. Consumers know that corporations get tax breaks from charitable donations. And while no one is ripping up a check for $1 million, people working on the ground level of social movements tend to side-eye single public-facing acts of corporate largesse, pointing out that in many cases, corporate donations amount to little more than a modern form of plenary indulgence plus a photo opp.
In an excellent recent interview with Just Capital, activist and Campaign Zero Cofounder DeRay Mckesson touches on a widespread frustration with companies that donate splashy sums to a cause for PR purposes, but don’t use their real power (ie. the power of their platforms) to effect change:
And that leads us to the second reason Home Depot’s donation isn’t the strongest action they could have taken.
“What’s interesting is that it’s all these statements [from corporations], but either a refusal to recognize, or just they don’t recognize, how much power they often have in cities. It’s like you’re off the hook when you donate – they donate like $100,000 to something and then they don’t ever do anything else.”
2. One-time actions don’t represent commitments.
Home Depot hasn’t said that they are committed to police reforms in line with or even to the right of what protestors are demanding. Nor have they used their corporate power to push for such reforms. But we know (or at least think we know) that they could, which is a major reason why the donation act in itself feels less powerful and authentic than it perhaps has a right to.
In effect, the home improvement giant has put their money where their mouth isn’t, creating a vacuum where they could be amplifying their donation with the power of their platform. If this is ultimately the extent of Home Depot’s response, in the minds of many, their generosity will slowly come to feel more like an abdication of responsibility than an assumption.
We’re not saying this attitude is fair, but it does have a strong historical basis. As consumers, we rely on the quality assurance and logistical competence that corporate America provides. As private citizens, we at least intuit that many of the world’s very largest corporations can, have, and do work against our personal interests in government.
Remember how the black citizens of Atlanta successfully threatened to boycott Coca-Cola in the 80’s if the company didn’t end its support of apartheid in South Africa? Probably not! But people from Atlanta remember. Specifically, they remember that they had to force Coke’s hand—that the beverage giant only did the right thing when faced with an imminent threat to their bottom line. That’s how it often feels to consumers when companies pair one-time donations with a paucity of other action. Like someone’s hand has been forced. And it can be pretty difficult to build goodwill and community support on the back of such a feeling.
That is why whatever your CSR strategy, you should plan to sustain the actions you take. Engaging in community action repeatedly and predictably over time is the only way to demonstrate to sophisticated, naturally skeptical consumers that you’re for real.
Now let’s cover some specific ways you can implement a CSR program that will help you build a strong sense of community among your customers, and help build up the community your business is a part of.
1. Creating a shared value business model
As we discussed earlier, addressing social issues with a business model is widely known as creating “shared value.” These models can be especially powerful because when shared value businesses generate profit and begin to scale, the social interventions they propose scale too (think back to that announcement from TOMs that the company had donated 300,000 pairs of shoes in 24 hours). In contrast, NGO’s and nonprofits can’t scale the services they provide beyond the amount of funding they secure from outside sources, which puts a natural cap on how effective they can be. And while it may be tempting to think of these models as limited to the TOMs and Warby Parkers of the world, “one for one” is just one of many strategies businesses can use to create shared value.
A particularly creative example is Christian Louboutin, the French maker of luxury shoes that decided to address the fashion industry’s pervasive diversity problem by pioneering “Nudes,” pumps and other footwear made to match every skin tone.
Louboutin’s Nudes collection was initially conceived as a way the company could increase representation in the luxury fashion world, and thereby make their luxury footwear more appealing to a wider audience. As it turns out, when you make products for more people, more people buy your products.
Louboutin’s Nudes have been successful enough to inspire a host of imitators. But because the company continues to grow and focus on this program in house, they continue to own the conversation on inclusivity in the luxury fashion world. And that’s huge. Because even when Louboutin isn’t announcing massive donations or engaging in other forms of traditional CSR, consumers gravitate toward them as the rare luxury retailer whose ethos is based around inclusion rather than exclusion.
Shoppers who choose Louboutin understand that they’re not only getting a fantastic pair of footwear for their money, but that they’re buying into a company committed to making sure that “everyone can meet their match.” And you just can’t buy the kind of goodwill, trust, and positive engagement that kind of knowledge creates.
2. Visible, measurable commitments to present and future action, whether internal or external
Not every business has the resources or opportunity to go full shared value. But that doesn’t mean that you can’t become a high-purpose brand that attracts customers via your practices as well as your products. Take Hygge & West for example, a women-run Minneapolis brand that has absorbed the messaging behind these protests and decided that it’s high time to make a change. To announce their intentions, they sent out a letter to their customers under the subject line “there’s work to be done.”
No, Hygge & West hasn’t fundamentally changed their business model, and no, they haven’t committed to helping dismantle the police, or anything like that. Rather, they’ve inventoried their own blind spots, and embarked on a good-faith effort to address them by intentionally enlarging the group of people with whom they do business and collaborate.
Thanks to Hygge & West’s transparency, customers will be able to hold them accountable to their promises, which in turn gives them a powerful inducement to stay engaged. Thanks to the thoughtful approach undertaken by the brand’s founders, the company has positioned itself to enact changes that are likely to make them more creative, more appealing to a wider range of consumers, and more profitable over the long term.
3. Meaningful donations to frontlines organizations
As recently as five minutes ago, you may have thought that announcing a generous donation was the best way for a corporation to support a cause. After all, what could be more altruistic than a profit-driven concern deciding to part with some of its hard-earned cash for the public good? Indeed, when we reason this way, cash donations seem like the ultimate rebuke to the Fredmanian thesis that “the social responsibility of business is to make a profit.” But as we’ve learned, in the absence of sustained supportive action, large donations often take on the flavor of political grandstanding, and savvy consumers are primed to reject community-oriented gestures they perceive as self-serving.
That doesn’t mean you shouldn’t open your checkbook to support worthy causes. Far from it! What it means is that whenever you do decide to donate money, you should also be thinking about complementary actions you can take to help that money go further. For instance, as you donate, you could simultaneously use your platform to amplify the voices and efforts of the organizations you’re supporting. Compare the end of this twitter thread from Shopify CEO Tobi Lutke, to Home Depot’s own vague and conciliatory donation announcement.
In point of fact, Home Depot is donating the same amount of money Shopify has committed, and to similar organizations. But Shopify is donating while using its platform to amplify the voices and goals emerging from the movement itself. In featuring the aims of Campaign Zero alongside their donation announcement, they may not be changing minds or even educating a significant number of people. But they are sending an unequivocal message to anyone who supports the reforms protestors are working towards: We stand with you. That message is much more difficult to deliver with any credibility when a naked, one-time donation is punctuated by a larger silence.
Bonus: Impact Advocacy
Curious about what the ultimate CSR initiative looks like? From a social standpoint, it looks like impact advocacy.
Just as individuals can wield the power of choice over businesses, so too can businesses wield the power of choice over institutions. When businesses exercise this power in Washington to advance their own interests, we call it lobbying. When they exercise this power in Anytown USA to advance the interests of their most vulnerable stakeholders, we call it impact advocacy.
Here’s a case in point, though it’s by no means singular. In 2017, the city of Charlotte, NC was poised to host NBA All Star Weekend (yes, we’re basketball fanatics). And for Charlotte, this wasn’t an ordinary year to be chosen to host. Steph Curry—back-to-back league MVP, owner of the world’s most emulated jump shot, and a Charlotte native whose father played for the Hornets—was at the height of his popularity, and in the midst of his second championship season.
Because of all the hype, the city of Charlotte was set to hoover up an unprecedented influx of dollars and enter the national consciousness for three whole days.
But there was a problem. At the same time the city was preparing to welcome home its favorite son for an ultra-lucrative blowout celebration, the state legislature was passing a package known as HB2, which included a provision requiring transgender people in the state to use the public bathroom corresponding with their designated gender at birth. In 2016, this law and conservative laws like it were springing up all over the country in reaction to the Supreme Court’s landmark ruling on same sex marriage just a year prior.
The NBA is an activist league by pro sports standards, and couldn’t countenance associating itself with a piece of legislation that seemed designed to walk back people’s civil rights. They informed the city of Charlotte that they’d be forced to relocate their signature mid-season event if the law wasn’t repealed. Curry came out and supported the NBA’s position, and over 100 businesses, including Apple, Google, Facebook, and Starbucks, signed a letter urging HB2’s repeal and threatening to pull out of the state entirely if their demands were not heard.
North Carolina didn’t initially roll over, but after losing the All Star Weekend (it was held in New Orleans instead) and coming to within a hair’s breadth of losing much more, the state legislature capitulated, repealed the law in 2017. And after several successive attempts to sneakily pass similar measures, state lawmakers ultimately bowed to a 2020 court ruling barring the state from enacting or enforcing further discriminatory bathroom policies.
What makes this form of intervention so powerful is that when successful, it creates positive, instantaneous, far-reaching, long-lasting change at the policy level. And that is why ultimately, for companies eager to do good, coordinated impact advocacy is the gold standard.
Now that we’ve internalized the kinds of action that are likely to engage your audience and create authentic, powerful connections between your business and your community, let’s take a look at three kinds of CSR (or pseudo CSR) that you should avoid at all costs.
1. Messaging with no action:
People who are putting their time, resources, and safety on the line to create systemic change don’t want you using their issue to increase your brand profile. And frankly, you don’t want to do that either. Beyond the fact that it’s profiteering to align your brand with a cause you don’t ultimately contribute to, in the end, the optics of not living up to your promises can spell disaster for your business. That’s why if all you’re prepared to offer when an issue becomes a flashpoint is a dose of rhetoric, it’s best in most cases to delete that gasoline-doused post rather than publish it to IG. Remember, if you’ve taken the time to lay the groundwork for a thoughtful CSR program, you’re unlikely to ever find yourself in this position anyhow.
2. Equivocal messaging
If you don’t take a clear stance on divisive issues, your audience will sense that your messaging is designed chiefly to protect your bottom line. That kind of obsequious pandering makes you look a lot more like this guy:
Than this guy:
As Phil Knight said in a 2019 conversation with the Stanford Graduate School of Business on why Nike decided to build an ad campaign around Colin Kaepernick’s public protests of police brutality,
“It doesn’t matter how many people hate your brand as long as enough people love it. And as long as you have that attitude, you can’t be afraid of offending people. You can’t try and go down the middle of the road. You have to take a stand on something, which is ultimately I think why the Kaepernick ad worked.”
Phil wasn’t saying that as long as your business has fans, you have license to act with impunity (Nike’s prolonged sweatshop scandal in the 90’s is proof enough of that). He’s saying that if your customers are truly connected to the values your brand projects, they’ll respect corporate actions aligned with those values more than they’ll respect corporate actions that seem designed to stay value-neutral.
Nike was boycotted by a tiny segment of consumers in the immediate aftermath of its ad with Kaepernick, but their profits and stock value went up. Fast forward to June 2020, with companies from Amazon to the NFL suddenly proclaiming that black lives matter, and Nike looks like a downright thought leader on racial justice. Not because of their activism, but because of their marketing. That’s the power of taking a stand in action.
3. Opportunistic Discounts, Giveaways, and other Promotions
If you’re a clothing retailer donating masks to frontlines workers, you’re using your brand’s power to ameliorate an urgent national issue. Great work! Your customers will love you all the more, and you may even attract new audience share from all the positive buzz. If you’re a clothing retailer offering customers a 30% discount because, ‘in these uncertain times, we could all use a little retail therapy,’ you’re using an issue to promote your brand. And consumers find that just about as distasteful as when college students launch Kickstarter campaigns to finance their spring break trips to Daytona Beach.
Bonus: Looking Outward Before Looking Inward
Are you weighing in on an issue without examining your own corporate practices? Because that’s one of the fastest ways to get ratioed on social media and unfollowed by your fans. Like education, social action begins at home. So whether your brand champions environmental issues or the eradication of hunger or racial justice in America, it’s a best practice to ask yourself whether you could be doing more before you ask others to pitch in.
If your company gives a percentage of its profits to save the rainforest, but your CEO flies private three times a week, your corporate culture may be at odds with its stated values. That’s why this guide is aimed at helping you to think through the issues your company is best positioned to take action on through responsible CSR.
At P3, where both of our principals and the majority of our senior staff are people of color, we have always recognized our employees’ rights to organize around issues of equal access and social justice. But we also realize that we cannot continue to move ecommerce forward unless we do more to provide our stakeholders with tangible, meaningful ways to ensure that the spaces ecommerce inhabits become more just and equitable themselves. And that includes our offices.
That’s why starting now, P3 is committing to provide each member of our full-time staff with a personal, annually replenished giving fund. We will encourage all P3 team members to make donations from these funds in accordance with their wishes and principles, and we will allow them to donate publicly or privately as they see fit. This is just a first step for our growing company, but we hope that by establishing this program, we are creating a forum of action where we may all come together to learn about the values we share and figure out new ways to amplify them.
We believe that empowering our colleagues to invest our resources toward the advancement of the social good will help us grow into an organization full of visionaries. One capable of channeling our individual passions into more creative, more powerful, and more collective interventions. We have a long journey ahead, but we know that setting off together gives us the best chance of arriving as one.
If you want to build the kind of company that outgrows all of your low-purpose competitors, that your community buys into in fat times and lean, and that reflects the very best qualities and aspirations of its constituents, then it’s time for you to join us. Because as the past few months have made painfully clear, opting out is no longer an option.
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