Companies mustn't compromise values for value

London, 30 July 2008 - Thought leaders in the PR consulting industry were virtually unanimous that organisations cannot afford to ignore CSR, even though consumers will focus less on the ethical credentials of brands in the current climate.


83% of respondents said that either some or most consumers will consider their ethical values a luxury in the current economic climate, while the same percentage thought that the reputational risk of relaxing CSR policies was too great.


Francis Ingham, Director General of the PRCA said “The results are conclusive. Value not values should be the focus of marketers in the near future, but companies who are shown to be acting in a less than ethical way should expect a backlash nonetheless.


“Reputation is hard won, but easily lost and companies need to think beyond the next quarter's profit and loss.”

What the panel said:

“You simply cannot ignore CSR, you have to embody it and act on it - being as good in reality as the claims you make. If businesses pay lip-service to what consumers now see as a prerequisite then those companies will eventually get found out and this will cause untold damage to their brand in the long-term. The issue is finding the business balance of saying and doing the right things in a way that is effective and within the boundaries of reality…and budgets.” David Wilson, Bell Pottinger Public Relations

“The measure of whether companies are greenwashing or whether they have really embedded values into their organisations will be how quickly they revert to their old practices in a tougher economic climate.” Narda Shirley, Gong Communications

“Fundamental change is taking place in our world and CSR is here to stay for some years as a fundamental indicator of an organisation's business value.” Sarah Howe, Text 100

“CSR will remain central to good business practice but consumers, especially in food, will definitely become less concerned in the short term.” Patrick Barrow, Ketchum

“Although there's no evidence to support CSR adding to your bottom line, we believe it will become the critical differentiator for a business.  Ignore it at your peril.” Angela Podmore, Kinetic Communications

“It is likely that the best companies already have a CSR policy, as these businesses tend to be more forward thinking and well managed, therefore the credit crunch shouldn't impact on a company's policy. Alas there are still many businesses who are not so well managed that may well use the current economic situation as an excuse not to implement or cut back on CSR.” Roland Cross, Broadgate

“Those businesses that didn't take CSR seriously will most likely either reduce investment in this area or look far more strategically at what it can do and this would be a good thing for CSR.  Tough economic times will bring into focus those organisations that generate tangible business benefits from acting responsibly. 

“The fact is that using CSR as a strategic approach to improving business processes in the majority of cases saves your business money, and credit crunch or no credit crunch, any FD is going to look favourably at that. Another important factor is that many businesses have begun in a much more sophisticated way than ever before to use their CSR activities as a market differentiator, which has instilled a level of trust in their brand from stakeholders, so whether it is ethical trading or going green, they are unlikely to want to give that up if it is likely to erode that trust, damage their reputation and ultimately hit sales.

“There are two other important points to consider. The first is that investors are increasingly concerned with ethics of business, so that they can assess the risk of their investment, and proof of solid CSR policies is going to be increasingly key to continuing to attract investment and to share price. Finally, the media and NGOs have long memories, clamber out of your responsibilities now and sometime in the future that decision may come back to haunt you.” James Wright, Trimedia

- ENDS -

What impact will the current economic climate have on consumers' ethical consciences?

  • None - 17%
  • Some consumers will consider it a luxury - 66%
  • Significant, most consumers will consider it a luxury - 17%

Can companies afford to relax their CSR policies during a tougher economic times?

  • Yes, for most consumers CSR comes second to our own standards of living - 17%
  • No, the reputational risks are too great - 83%

csr

About the PRCA

  • The Public Relations Consultants Association (PRCA) is the trade association for the UK PR consultancy industry.
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