Companies around the world are increasingly realising that social responsibility must be integrated into all of their operations, and not treated as a separate issue, explains Dorothee Hutter, Corporate Communications Director of GIZ, a major German state-owned company which works globally to promote sustainable development through international cooperation.
“Corporate Social Responsibility involves corporations voluntarily taking responsibility for improving conditions in society by going beyond fulfilling their legal requirements,” says Hutter. “Taking responsibility on a global scale will be one of the most important topics over the coming years for businesses in terms of improving both production and people’s quality of life around the world. But it must become an integral part of core business, and not something on top.”
The terms sustainability and corporate social responsibility (CSR) have rapidly become part of business language. A survey of run in 2010 by the UN Global Compact and Accenture showed that the chief executives of major companies overwhelmingly feel that sustainability has become critical to their success, and could be fully embedded into their core business within ten years. “Within 5-10 years no big company will be without its sustainability or CSR programme, but the next stage must be to integrate these issues into all processes,” says Hutter.
Although CSR issues have only recently hit the radar in many poorer countries, there has been a change in the ways local communities around the world respond to new industrial developments. Earlier such plans were generally welcomed for the new jobs they would bring, but today people also think of the wider consequences. “Today companies must show how they will address social and ecological impacts in proposals and plans right from the start” says Hutter. Legally required environmental and social impact assessments can be seen positively as providing an opportunity to do this.
Hutter mentions Germany’s chemicals sector as an industry that has taken such steps, partly in response to bad publicity following a disastrous chemical spill in Switzerland that severely polluted the River Rhine in 1986. “There has been a growing awareness that citizens should be able to participate in decision-making processes where developments like new plants are planned, to ensure that companies truly have a ‘licence to operate’,” she explains. “The acceptance of actions which are only based on generating money is clearly decreasing, and the wider quality of life is becoming more of an issue.”
Even in China, which is still widely seen as an authoritarian country where ordinary people have little say over developments, Hutter believes local communities are beginning to be able to campaign effectively against developments that would pollute the environment.
In emerging economies like China, India and Brazil, consumers in growing middle classes are rapidly getting interested in corporate responsibility. Hutter points out that even in a country with such widespread poverty as India, about 100 million people have purchasing power similar to western consumers. “This means more people than ever now have the chance to choose, and this can put pressure on companies. When buying toys, vegetables or other products, they are starting to consider the environmental impacts of production. In Brazil, for example, a company called Natura is successfully selling organically produced cosmetics by publicising their efforts to conserve biodiversity. This is quite a new trend, but one which will surely increase,” she explains.
In developing countries cheap and simple measures can greatly improve a company’s image locally. “In Uganda, for instance, even providing workers with lunch is seen as a big bonus. HIV/Aids workplace programmes – involving testing, health care and publicity on HIV/Aids prevention – are also seen as an important benefit. For companies they are a worthwhile investment both in the health of their staff, and in their reputation as an attractive employer,” says Hutter.
Businesses in Europe are meanwhile responding to higher levels of pressure from responsible consumers by working to improve the social and environmental impacts of their suppliers’ operations at home and abroad. “Our work at GIZ with the German retail giant Lidl has successfully raised corporate social standards among clothing producers in Bangladesh,” says Hutter. “The German online shopping giant OTTO is meanwhile providing training in organic farming methods for cotton producers in Africa, and major coffee traders in Hamburg are helping to develop social standards for coffee plantation businesses.”
Schemes like these can also help producers to gain Fairtrade and organic certification. The spread of such labelling schemes is another sign of the way that corporate responsibility is being driven by consumer power. “Offering a cheap product is no longer enough, and companies also have to demonstrate that their production processes are responsible,” says Hutter.
GIZ is increasingly realising its international development work through Public Private Partnership schemes that involve companies as well as government agencies. Dorothee Hutter believes these “PPPs” can play a vital role by ensuring that developments will also be economically sustainable. “Getting businesses involved makes developments different from philanthropic actions, which are valuable in their own way, but depend much more on the continued availability of resources. One programme I was earlier involved with in Uganda, for instance, used donations to build up a local film industry for three years, but when hard times hit the funding stopped and the initiative collapsed,” she remembers. “Enterprises don’t get involved in PPPs for fun, but to make money. To achieve genuinely sustainable development it’s important to merge economic interests with social development.”
As a company working with socioeconomic development GIZ naturally emphasises the need to involve local communities in decision-making. But Hutter believes that all companies should work with local civil society organisations (CSOs). “Civil society organisations range from well-established non-governmental organisations (NGOs) to very small groups of individuals working together towards certain goals. They can have considerable power both in terms of purchasing power and by affecting a company’s reputation through the role the play as watchdogs,” she explains. “With reputation becoming more important in the corporate world, companies need to change their business model. Instead of making decisions alone, companies must reach decisions through dialogues with CSO partners. This can be hard, as it often feels like they don’t speak the same language, but both sides have to make an effort to understand each other’s views and find compromise solutions.”
Hutter points out that CSOs generally enjoy high levels of public trust in different societies compared to businesses, governments and the media, as indicated by the findings of the 2011 Edelman Trust Barometer, which surveys informed public opinion in various countries.
CSOs focusing on consumer issues and corporate responsibility are particularly gaining influence. Consumer campaigns such as boycotts can spread like wildfire by utilising new social media. Hutter emphasises that social media can greatly boost consumer power, recalling the rapid escalation of a campaign run in the Middle East against Danish cheese in response to the publication of cartoons featuring Muhammad in a Danish magazine in 2005. Such events are making companies realise the potential negative impacts of their image around the world. But at the same time Hutter believes they should also see an opportunity to distinguish themselves from their rivals by publicising the sustainability of their production and products.
Consumers and CSOs are wising up to the difference between genuine corporate responsibility and public relations greenwash. “Companies must make sure that they’re not only talking about doing good, but genuinely incorporating social and ecological standards into their main processes. In communications on sustainability and responsibility it’s vital to demonstrate what a company is really doing through examples,” says Hutter. “Communicators often also have to increase awareness of sustainability issues within their companies. Having a special department for sustainability or CSR communications is fine in that it recognises the importance of these issues – but ultimately such issues should be integrated into all communications work.”
Hutter believes that the popular viral Corporate Bullshit Bingo game can be helpful for communications workers. “It’s very easy to use the right buzzwords like sustainability and transparency, and there’s often pressure within a company to use the latest ‘in’ words in communications work. But when reading through communications it’s a bad sign if you can’t tell whether someone is writing for people within the company, or in the outside world!” she says.
Hutter stresses the importance of keeping communications on sustainability work brief and simple, and avoiding pressure from in-company experts to explain every complex detail. “The real art is in saying something in one sentence instead of in one page!” she says.
Dorothee Hutter directs the Corporate Communications at GIZ. She has a longstanding experience in corporate communications, has worked for NGOs and governmental organisations, mainly in the field of communications but also in corporate strategy and as country director in Uganda for GIZ.
GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit) is a major German state-owned company that works to promote sustainable development around the world through international cooperation. GIZ works in more then 130 countries for clients including national governments, the EU, the UN and the World Bank, as well as major companies and foundations in the private sector.
Dorothee Hutter gave a presentation at ProCom-day 8.6.2011.