What Will Happen to CSR Investment in a Recession?

I am profoundly cynical about surveys such as this one , which purport to show that consumers will continue to support socially and environmentally responsible brands and companies even as times get tough.

The problem, of course, is that what people say they are going to do does not necessarily align with what they actually do. It's not that they lie, exactly; but when they're asked to think about their future behavior they tend to think about an idealized version of themselves in idealized circumstances, and predict more noble and altruistic behavior than is likely to occur in real world conditions. Marketers who stake their future on what consumers say they are going to do are therefore almost certain to lose a lot of money.

I suppose I should be equally cynical about the results of this survey , drawn to my attention by Cone's What Do You Stand For? blog, which finds that "80 percent of corporate sustainability executives surveyed from across North America plan to maintain or increase levels of sustainability-related spending in 2009, despite the current economic conditions." Perhaps they too have an over-optimistic view of their own nobility, or--more to the point--the nobility of their companies.

But I suspect that many if not most of the companies responding positively to this survey will in fact maintain their commitment to social and environmental responsibility, for pragmatic business and public relations reasons. First, because environmentally sound stewardship is now seen by many as economically beneficial: green policies reduce waste and lower costs. And second, because the public--or at least a significant cross-section of it--is likely to look unkindly on companies that backtrack on progressive policies.

Consumers and other stakeholders today demand an authentic commitment to social responsibility: they won't tolerate lip service, and in an era of increased transparency, they are quick to identify any company that talks the talk but doesn't walk the walk. Any company that believes it can ignore its social responsibility commitments in tough times, and resume them when conditions improve will be regarded--quite rightly--as insincere, and will pay the price in terms of reputation.

Quick Hits

  • Publicis Groupe media agency ZenithOptimedia expects U.S. ad spending to drop 6.2 percent in 2009, The Wall Street Journal reports. WPP's GroupM sees a decline of 3 percent. "Spending cuts probably will be most severe for newspapers, magazines and radio as advertisers shift dollars to digital media," the paper says.

  • Incoming Obama press secretary Robert Gibbs is preparing for his new role, The Washington Post reports--slightly more breathlessly than would appear to be warranted.

  • There's very little in the media that's worse than British newspaper coverage of vaccines: several of the biggest dailies are obsessed with the totally-discredited idea that the MMR (measles, mumps and rubella) vaccine is linked to autism and worse. The Guardian's Ben Goldacre points to some particularly egregious reporting--or the lack of it--last week and wonders "whether everything else in the media is as shamelessly, venally, manipulatively, one-sidedly, selectively reported on as the things I know about."

  • Spiked is a British site I enjoy occasionally for its entertaining contrarian approach, but the lead on this story cannot be allowed to pass without comment. It introduces the story's subject as "former Enron lawyer turned climate change sceptic Christopher Horner," as if the switch from representing the most environmentally irresponsible company in the known universe to rejecting the science on global warming required some sort of dramatic St.Paul-on-the-road-to-Damascus conversion.

  • Congratulations to Susan Henderson on her appointment as vice president of communications at Harley-Davidson. Susan is a cool corporate PR person--her experience includes top positions at Miller and Wrigley--and Harley is an extremely cool brand, and one that understands and values the role of public relations. Having said that, here's a clipping she probably won't want to keep for her scrapbook. I know it's convention to include share price information in any story about a public company, but the implication seems to be that "shares of Harley fell 30 cents to $15.60 in morning trading Wednesday" as a result of Henderson's appointment, which I am 100 percent sure is not the case.

  • A Missed Opportunity

    As I may have mentioned, I had intended to do some blogging and reporting from the International Public Relations Association conference I attended in Beijing a couple of weeks ago. In the end, I decided--for perhaps the first time in my life--to follow my mother's advice that "if you can't say anything nice, don't say anything at all."

    The conference, which was run by the Chinese public relations association CIPRA, was an opportunity to showcase the vibrant, dynamic and exciting Chinese PR sector to the rest of the world, the way that the ICCO summit in Delhi two years ago showcased the profession in India.

    But everything about the IPRA conference was wrong, from the venue--an hour's drive from downtown Beijing in busy traffic, making it impossible to do business in the city and attend the conference--to the acoustics: a speech by Harold Burson was almost inaudible as a result of a mediocre sound system and incessant chatter by attendees, many of whom showed an astonishing lack of respect for one of the giants of our industry.

    As for the content, it was almost uniformly drab. I can summarize no better than the Arthur Page Society's Roger Bolton: "Some of the Chinese public relations professionals presenting at the IPRA meeting... largely avoided strategic issues in favor of a mind-numbing recitation of their organization's recent communications tactics and outcomes."

    All in all, a huge disappointment. (Although my visits with various PR agencies in Beijing was productive and informative and an extremely worthwhile investment of my time.)

    The Journal's Op-Ed Page Argues with GM CEO Over Green Cars

    Reading The Wall Street Journal editorial page these days is like stepping into an alternative universe, one in which the recent financial crisis is the result of too much regulation, AIG--currently plowing through $xx billion of government bailout money--is a victim of excessive government interference, and U.S. automakers would be just fine if only they were allowed to continue producing big gas guzzling vehicles.

    So an editorial today (sorry, but I can't persuade the Journal's execrable search function to give it up) blasts Democrats for insisting that the American auto industry agree not to destroy the planet in exchange for a government handout. Democrats, the Journal accuses, "want an entirely different American auto industry... For the greens, the bailout is their main chance to remake Detroit according to their dictates." Americans, the Journal insist, don't want cars with higher fuel efficiency.

    Under normal circumstances, the Journal's editorial would elicit little more than a yawn. The Journal attacking Democrats and regulators is a classic dog bites man story. Except that on the very next page, there's a contribution from General Motors chief executive Rick Wagoner, in which one of the key arguments for giving the company a helping hand is the fact that it is starting to produce--and sell a lot of –environmentally friendly cars.

    Wagoner points to the Chevy Maibu (it "leads its segment in highway fuel economy" and even in a down market, sales are up 39 percent) and the Chevy Volt, which can go 40 miles on electricity alone. "We are expanding our family of hybrid vehicles, investing in advanced biofuels, and continuing the development of hydrogen fuel-cell vehicles."

    At this point, I think we can be confident that as long as Wagoner keeps doing the opposite of whatever The Wall Street Journal advises, GM will be able to turn itself around after all.

    Authenticity and Its Discontents

    One of the highlights of last week's visit to Beijing--I'm on to Hong Kong now--was the a meeting sponsored by the Arthur W. Page Society bringing together some leading Chinese practitioners with a handful of U.S. Page representatives to discuss the society's "Authentic Enterprise" white paper and how it might apply to the Chinese market.

    The "authentic enterprise" report suggests that companies are operating on a "global playing field of unprecedented transparency and radically democratized access to information production, dissemination and consumption" and argues that "authenticity will be the coin of the realm for successful corporations and for those who lead them. Going forward it will not be sufficient to shape perceptions within narrowly defined contexts. It will be necessary to demonstrate authenticity in radically open environments."

    In Beijing, outgoing Page president Roger Bolton made it clear what that means: in order to succeed, companies need to "align themselves with the public interest."

    The emphasis on authenticity has its critics, most vocal among them Alan Kelly, former CEO of Applied Communications and now CEO of The Playmaker's Standard, "a management consulting and web software services firm specializing in communication and competitive strategy."

    Kelly has issued a rebuttal to the white paper which can be found at his blog and (to its credit) the Page Society's. He complains that authenticity is not measurable; that it is "indirectly earned," so the chief communications officer cannot be responsible for it. But his main complaint seems to be that it comes down too heavily on the priest side of the debate over whether PR people should be "priests" (the conscience of the corporation) or "warriors" (advocates for the corporation's positions).

    Says Kelly, whose new business is all about "playmaking," which involves the use of communications to deliver sharp competitive advantage: "We are better off positioning the corporate communication function as a competitive enterprise and serving as its principled advocates, not its brokers of values. To do otherwise is to apply a sentimental moral imperative on what is a bedrock and fast-evolving function of business.... If we set the expectation that a CCO's first purpose is to appease and not compete, then we will dumb-down the science of our certain game."

    I find myself, reluctantly, sounding like a voice of moderation in this debate. I sympathize with Kelly's idea that public relations is an advocacy business, although I think that on occasion it is the job of PR people to advocate for stakeholders within the organization as well as to advocate for the organization's positions among stakeholders. But I don't see authenticity as synonymous with appeasement, and I don't think the Page Society does either.

    Rather, authenticity seems to me to be a necessary precondition for the success of the plays Kelly so much enjoys running. Plays--PR strategies--are much more likely to be effective if the organization running them enjoys a high level of credibility and strong pre-existing relationships with its stakeholders. And they are much more likely to fall flat if the company has no trust, no goodwill.

    Having said that, the Page Society needs to understand--as I'm sure it does--that authenticity is not by itself, a game-changing strategy. It is necessary, but not sufficient, for success. The authentic enterprise exists in a highly competitive environment, and it still needs to use the full arsenal of communications--I use the military term deliberately--if it is to triumph in the marketplace.

    Quick Hits

  • According to Wired , "General Motors, teetering on the brink of insolvency, has taken the extraordinary step of calling on employees and dealers to personally urge lawmakers to approve another loan package that might keep the beleaguered automaker from going under." Is this really so extraordinary? I assumed it was common practice. In a situation like this, an ordinary worker--Joe the Autoworker--has ten times the credibility of the CEO and his army of lobbyists.

  • The Boston Globe reports that "drivers for DHL Express recently learned they would be losing their jobs next year, but many of them didn't learn it from their employer. They heard the news while dropping off packages in the Boston area." Always a classy move.

  • According to George Will, Senate Republican leader Mitch McConnell opposes public financing of presidential campaigns on Jeffersonian grounds ("To compel a man to furnish contributions of money for the propagation of opinions which he disbelieves and abhors is," said Jefferson, "sinful and tyrannical"). So, can I get the portion of my money that the Bush administration funneled to the Lincoln Group for Iraqi propaganda back? Oh yes, and anything that has been spent on the "war on drugs" PR campaign over the past 20 years?

  • Modestly encouraging news in this survey of world business leaders, who agree on the need for increased regulation of hedge funds, ratings agencies, and securitizations and other structured finance products, support stronger national regulation, and split on the need for a global regulator--with strong support for the latter from continental Europe and a tepid response (surprise) from the U.S. and the U.K.

  • Another dozen words and this quick hit would be longer than this news release from Jet Airways (h/t FADS). Even at its current length, it is already more informative, interesting, and newsworthy.

  • The New York Times introduces a new feature, reprinting drivel from charlatans . (Okay, not so new; I had forgotten William Kristol's column.)

  • "I was just doing a favor--a favor for a friend. I never thought it would turn into this big thing," says celebrity publicist who helped concoct a bullshit story. for his no name client. Yeah, whodathunk making up lies and shoveling them to the media could backfire?

  • Online Activism in China: From Worst Practices to Best Practices

    The last time I was in China was in April, and at the time the Chinese newspapers were full of stories about protests: not so much the protests against China that were taking place around the torch relay in Europe, but the protests in China against those European protestors, and against European brands and French brands in particular. (The Chinese were also up in arms against CNN, because Jack Cafferty had made some characteristically asinine comment calling the Chinese thugs.)

    It is not always easy in China to discern how much events are driven by the government and how much they are driven by ordinary consumers, but there were signs that while the government had provoked the response, it was not entirely in control of the nationalist fervor that was being vented through the protests. Ordinary Chinese people had taken to the Internet, and were using it to spread information and speculation, and to organize boycotts and demonstrations.

    This newfound Internet activism was even more evident in the wake of the Sichuan earthquake. First, there were blog posts criticizing companies for failing to respond with donations or other assistance, the first of which appeared literally within hours of the news. Many of those posts appeared to come from company employees who felt they could not confront their company managers directly, but used the anonymity of the Internet to deliver a message. Then there were criticisms of companies that did make donations, but appeared to be taking too much credit.

    Another story, which I have now heard from numerous sources, involves a protest against Coca-Cola, organized by students using networking sites, after a Chinese student in Germany came across an old Coke ad featuring a Tibetan monk--which was interpreted as a political statement of support for the Tibetan independence movement. Thousands of students had signed up to boycott Coke--and call for its expulsion from the Olympics, where it was a sponsor--before the company was aware of a problem.

    And in Chendu, hundreds protested against the construction of a new petrochemical plant after a campaign that was organized online.

    In China (as in many other parts of the world) the first response to online activism draws on the old command-and-control model of communications. I was pointed to one firm that has built quite a successful business building credible online identities over time, and then "renting out" those identities to companies, who hide behind that credibility--often "burning" the identity in the process--to address whatever online issues they might have.

    Obviously, I don't believe that approach is sustainable. But I do believe that over the next 12 months companies operating in China are going to be forced to develop long-term strategies for engaging with activists online, and given the size and intensity of the online activism here, I wouldn't be surprised to see some of the most important learnings and some global best practices emerge from this part of the world.

    Financial Services Industry Says Americans Too Stupid to Understand What It's Doing with Their Money

    One of the strong principles underpinning the $700 billion bailout agreed last month was transparency. But now Bloomberg News reports that "the Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral."

    Bloomberg, to its credit, is suing under the Freedom of Information Act to find out exactly what the Fed is doing with the public's money, including the terms under which these loans were issued. Meanwhile, the Fed isn't commenting and neither is the president-elect, who had promised greater openness and transparency in government.

    Those who are commenting are trying their hardest to justify not leveling with the American people about what's happening to their money. Scott Talbott, senior vice president of government affairs for the Financial Services Roundtable: "You have to balance the need for transparency with protecting the public interest. Taxpayers have a right to know where their tax dollars are going, but one piece of information standing alone could undermine public confidence in the system."

    Presumably, the challenge of putting that information in context is beyond the combined communications skills of the U.S. government and the financial services industry.

    The thing is, if what Talbott says is true, surely that implies that the information is material? Which means that the recipient companies have a legal obligation--in addition to the obvious ethical obligation--to share the information with their shareholders.

    Is Obama Considering Junk Science Proponent for the EPA?

    One of the things that have to change under an Obama presidency is the establishment view of science. After eight years of climate change denial and the cynical embrace of junk science and pseudo science by the Bush administration, it would make a nice change to see policy on scientific issues--from the environment to healthcare and beyond--driven by data rather than dogma. That's critical to the quality of public dialogue around important scientific issues.

    Unfortunately, the early signs are not good, if reports that Obama is considering Robert F. Kennedy for a senior role at either the Environmental Protection Agency or the Department of the Interior are to be believed. Kennedy is a leading proponent of the entirely science-free claim of a link between vaccines and autism, having authored this conspiracy theory piece for Rolling Stone.

    For the record, pretty much the entire medical establishment--including the World Health Organization, the Institute of Medicine, and the Centers for Disease Control & Prevention--has dismissed the suggestion that vaccines cause autism as scientifically unfounded. And at least five major studies have found no link between autism and thimerosal--which in any case was removed from vaccines several years ago.

    As a result of vaccination hysteria, measles--a deadly disease--is making a comeback in the U.K.; by scaring parents into avoiding vaccines, Kennedy and his ilk risk instigating a major public health crisis in the United States too. That's not change we can believe in.

    It's a New Dawn, It's a New Day, and...

    I went to bed last night, and woke up a little after midnight, just as the first polls were closing back in the United States. I watched the election coverage until about 8 this morning, then I headed out to Paddington station, for a train to Heathrow. In an hour or two I will be on a Virgin Atlantic flight to Shanghai.

    On my way to the airport, and then in the Virgin Clubhouse at Heathrow, I have had half a dozen conversations with Brits (and one, I think, German). I get mistaken for an American a lot back in my home country; apparently, I picked up a trans-Atlantic accent during my 20 years in New York. Their excitement over the new leader of the free world, Barack Obama, was palpable (though not, it should be said, as palpable as their contempt for the outgoing office holder.)

    Obviously, after the experience of the past two presidential elections, the first few hours of CNN's coverage (in the U.K., it's either CNN or Fox; we chose the lesser of two evils) were somewhat nerve-wracking. Even after CNN called it for Obama at around four in the morning, I kept expecting someone to announce that they'd found 10,000 missing McCain ballots in Ohio, or that 20,000 Democratic votes had gone missing in Florida. It was only after McCain's concession that it really sank in.

    Only a month or so ago, my British and continental European friends were expressing their doubt that Americans would ever vote for a black president. Or that the same people who voted for George W. Bush four years ago--long after it became apparent who he really was--could vote for someone like Barack Obama. At times I worried that I must sound hopelessly naïve, assuring them that I was confident of an Obama victory, that for the vast majority of Americans the content of Barack Obama's character was more important than the color of his skin.

    But my faith in America turned out to be entirely justified. I am relieved, excited, and for the first time in eight years optimistic that America can once again be a force for good in the world. America chose hope over fear; unity over division; and decency over negativism.

    [I was going to include a whole section here about the unspeakably vile campaign run by John McCain here, but if Obama can be gracious in victory, I see no point in dwelling on the negative.]

    Once the immediate euphoria of this moment has passed, I dare say I will have some more semi-coherent thoughts on the public relations lessons to be drawn from this victory. For the moment, though, I am going to enjoy an early morning beer and toast the 44th president of the United States, who I believe has a chance to be one of the greatest in the country's history.

    More Entries

    Designed and Hosted by: Online Corp This blog is running version 5.9.1.002. Contact Holmes Report.com