Do CSR initiatives actually improve your reputation?

Iceland's palm oil ban is widely seen as a good thing, but that may not actually change the way it's viewed.

by Ed Coke
Last Updated: 23 Apr 2018

Just four months into 2018, it has already been a big year of bold environmental action from UK businesses. 

The emotional scenes of the BBC blockbuster Blue Planet 2 appeared to act as a catalyst for companies to declare war on single-use plastics. Wetherspoon’s, All Bar One, McDonald’s and Deliveroo were just some of the corporates to ban, phase out or reduce single-use plastics in response to consumer feedback. 

Pret A Manger incentivised its customers further by doubling the discount on coffee when filling a reusable cup. And now Waitrose, the doyen of middle-class shoppers, has announced it will stop using disposable coffee cups by the autumn, in a bid to reduce over 50 million cups going into landfill each year.

In early April, we witnessed arguably the boldest move yet in this area, with Iceland’s announcement that it would become the first major UK supermarket to remove palm oil from its own-label food. This comes on top of Iceland’s earlier pledge to go plastic-free on own-label packaging by 2023.

Early indications show consumers and influencers alike welcomed Iceland’s move. Analysis conducted by Social360 revealed that, in the first few days following the announcement, over 2,000 consumers shared the news on social media, with the company endorsed by the likes of Ben Fogle, UN Patron of Wilderness.

Users were vocal in their support of the pledge, with it encouraging them to shop at Iceland. Many called on other supermarkets to follow suit. Iceland’s move also had the endorsement of Greenpeace, adding third-party backing to the commitment.

So far, so laudable; in an era where fewer than half of UK consumers trust business – many because they don’t view companies as transparent and honest – these kinds of demonstrable actions no doubt go some way towards making customers feel better about their shopping choices, and make employees more motivated and reassured that they are working for an environmentally responsible company.

But aside from ‘doing good’, what are the likely impacts of these initiatives on the corporate reputations of the companies undertaking them?

From a consumer perspective, we know that corporate responsibility is a major driver of reputation.  Data from Reputation Institute’s annual RepTrak study shows that Citizenship – a dimension that covers environmental stewardship and positive societal impact – is the third most significant factor in driving a positive reputation, and has become increasingly important in the past five years.

Even among the investment community, that most sanguine of stakeholder audiences, actions around corporate responsibility are increasingly expected as standard. BlackRock supremo Larry Fink’s letter to CEOs in January 2018 made this clear: you need demonstrate your corporate purpose and account for your impact on society if we are to continue to invest in you.

But for corporate responsibility to have a tangible impact on reputation, it has to be a long-term commitment that is managed well, resourced appropriately, and expertly communicated. 

Even then, some of the best-known corporate responsibility programmes in the UK have struggled to improve reputations significantly. M&S’s Plan A celebrated its 10-year anniversary in 2017, yet the company’s reputation among consumers continues to remain some way off the pace, ranking 44th in the UK RepTrak 2017 results. 

Unilever’s Sustainable Living Agenda, whilst deeply impactful among professional stakeholders, has yielded little uplift in consumer opinion of the company. And although Sky’s ‘Bigger Picture’ initiative has touched numerous aspects of corporate responsibility, overall the company sits outside the top tier of reputation according to the RepTrak ranking.

‘Doing Good’ can only truly improve corporate reputation when it feels like a natural fit with the public-facing behaviours, competencies and values of a company. The CEO has to own it, and be seen to do so. Corporate responsibility needs to be regarded as how business is done, rather than an initiative to be dialled up or down according to business climate. 

The environmental commitment shown by Iceland and its managing director Richard Walker, combined with the genuine improvements the company is making in customer service and workplace, gives them a great chance of setting themselves apart reputationally. The jury is out, but maybe more of us will follow Mum and ‘go to Iceland’.

Ed Coke is the founder of Repute Associates.

Image credit: Liderina/Shutterstock

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