BY: Savanna Pruitt
Over the course of the past few years, it seems that companies and corporations have become more focused on sharing their values and commenting on current events. Countless CEOs and public relations representatives have made statements clarifying their positions on movements and events such as: Black Lives Matter (BLM), COVID-19, and Stop Asian American Pacific (AAPI) Hate. Why are these companies and corporations concerned with publicizing their stances on social and political issues, and how is it impacting consumers?
According to Investopedia, “Corporate social responsibility (CSR) is a self-regulating business model that helps a company be socially accountable—to itself, its stakeholders, and the public.” Essentially, CSR is a public relations and branding tool that involves a company and its leaders sharing stances on topics related to the economy, the environment, social issues and more. Many companies who practice CSR do so to relate to and solidify support from stakeholders, customers and employees. Investopedia adds, “…some company founders are also motivated to engage in CSR due to their personal convictions.” In some cases, companies are forced to practice CSR in response to internal crises or other situations that require a public statement from corporate leadership.
CSR and CEO activism are proving to have a growing impact on American consumers and society as a whole. A survey conducted in 2018 by Weber Shandwick found that “approximately half of Americans (48%) think CEO activism has an influence on the government, considerably larger than one year ago (38%).” These numbers show that consumers believe in the power of CSR, and they also show that Americans are paying attention to what corporations and CEOs have to say about issues that concern the public. A survey conducted by Sprout Social in 2018 found that “the majority of consumers (70%) believe it’s important for brands to take a public stand on social and political issues.” The same survey found that “sixty-six percent of consumers who want brands to take a stand on social say it’s because they believe brands can create real change.”
CSR has proven to be an effective tool for some businesses, but it has certainly backfired on others. For example, PepsiCo’s 2017 ad featuring Kendall Jenner “caught flack for trivializing protest movements and co-opting imagery from movements like Black Lives Matter. The ad was so widely criticized that it ran for only a day,” according to Sprout Social. This single ad caused millennials nationwide to reconsider purchasing PepsiCo products, and it hurt PepsiCo’s brand image. On the other hand, Starbucks is known for being deeply committed to its CSR efforts such as offering free college to employees, cutting back on the use of plastic, and serving ethically sourced coffee. As a result, many consumers and employees are loyal to and supportive of the Starbucks brand.
The effect of a company’s CSR depends entirely on the methods used to carry out the efforts and how the public perceives the intention of the actions. Sprout Social reports that “more than half of consumers (53%) believe brands only take a stand for public relations or marketing purposes.” These consumers revealed they feel more positively toward a company “when the issue they take a stand on directly impacts their customers (37%) or business operations (36%).” In other words, if a CEO comes out and randomly supports a cause that has nothing to do with their business, most consumers will interpret it as disingenuous and their opinion of the company will be negatively impacted.
As consumers, it is important that we keep CSR in mind when deciding where to spend our money. Our dollars have power, and we have the ability to support businesses that align with our values and that are working to make the world a better place overall. We also need to be mindful of CSR as employees. In today’s society, many of us have the privilege of choosing to work for companies that align with our values and ideals. As both consumers and employees, it is imperative that we hold company leaders and employers financially and socially responsible, especially when the organizations in question generate millions or billions of dollars in revenue annually.
Sources:
https://www.investopedia.com/terms/c/corp-social-responsibility.asp
https://www.webershandwick.com/wp-content/uploads/2018/07/CEO-Activism-2018_Purposeful-CEO.pdf
https://sproutsocial.com/insights/data/brands-creating-change/