How Corporations Co-Opt Compassion: Compliance, Cause-Related Marketing, and Corporate Social Responsibility

By Mara Einstein

Cause marketing has become the go-to strategy for companies that want to engender consumer loyalty while differentiating themselves from the competition. While these campaigns raise some funding and help to increase awareness of important social issues, they are not as positive as they market themselves to be. Alternatively, social innovation—a strategy that embeds “doing good” into the workings of a corporation—is recommended as a means to increase social good while delivering ROI.

Beyoncé appears on the TV screen in a beautifully shot black-and-white commercial, reminiscent of 1980s Bruce Weber/Calvin Klein advertising. First, we see a pair of five-inch black stilettos as she walks into frame. Then, the camera pans up her body as she kneels on an empty sound stage with a stark white backdrop. Dressed in a plain white T-shirt and jeans, she speaks directly and earnestly into the camera.

Beyoncé is not announcing her latest concert or her newest album. She is there to demonstrate her commitment to feeding the hungry by teaming up with General Mills’ Hamburger Helper to launch “Show Your Helping Hand” (SYHH), a campaign that in conjunction with America’s leading hunger relief organization—Feeding America—proposed to deliver 3.5 million meals to food banks.

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On the face of it, this seems like a great idea. Hamburger Helper—a recognizable household name—ties in with A-level talent to draw attention to the issue of hunger at a time when more and more Americans are going hungry due to increasing unemployment and the continuing recession. In addition, the campaign is implemented in conjunction with Feeding America, the leading distributor of food through local food banks. Food banks get food; Feeding America gets funding; hungry people get fed. So what’s the problem?

The explosion of cause-marketing campaigns and other pro-social corporate activities like this have shifted attention away from causes and on to corporate interests.

The explosion of cause-marketing campaigns and other pro-social corporate activities like this have shifted attention away from causes and on to corporate interests. In so doing, the promotion does far more for the corporation and the celebrity than it does for the homeless and hungry. In this case, by tying in with Beyoncé, General Mills not only brings attention to its faltering brand through endless publicity, but may also increase its significance for a younger, hipper audience. By requiring consumers to input special codes to generate a donation to Feeding America, the brand company also captures personal data about consumers. Finally, the connection to Feeding America brings with it the patina of a company with a heart—“We’re not just a food company interested in profits; we’re a food company that cares about feeding hungry people.”

“Show Your Helping Hand” is just one example of how hundreds of consumer companies have gone about aligning their products with social causes in an effort to sell more of them or to improve sagging corporate reputations. In some cases, this has meant fund-raising through product purchases; in others, the social cause is related to how the company does business: American Apparel not using sweatshop labor or Scotties tissues planting three trees for each one it cuts down. While this corporate-cause promotional practice was just a trickle only a decade ago, today, more and more products, services, and corporate entities are touting their positive social initiatives in their advertising. According to the 2010 PRWeek/Barkley PR Cause Survey, 75 percent of brands now utilize cause marketing, which is a significant jump from the 58 percent it was in 2009, and most marketing executives (97 percent) “believe it is a valid business strategy.”1

So why do this? Why the social connection? Much of it has to do with a push from consumers and the ability that they have to influence the market through Twitter, blogging, and Facebook. But that’s not the only reason. Patrice Tanaka, CEO of CRT/Tanaka, told me that tying a consumer product to a cause has become “the price of admission.” But while it has become necessary in the minds of marketers to find appropriate cause-brand connections, the sad reality is that they rarely effect real change.

Companies can demonstrate their commitment to pro-social programs in six ways: compliance, philanthropy and community relations, cause marketing, CSR, ethical brands, and social innovation.

Levels of Responsibility

In Compassion Inc.: How Corporate America Blurs the Line Between What We Buy, Who We Are and Those We Help, I present the corporate responsibility spectrum in which I suggest that companies can demonstrate responsibility and their commitment to pro-social programs in six ways: compliance (doing what the law requires), philanthropy and community relations (donations, sponsorships and scholarships unrelated to the business), cause marketing (linking product sales to charitable causes), CSR (connecting other functions of the business to social and environmental impact reporting), ethical brands (building a brand around social or environmental benefits), and social innovation (embedding social and environmental principles into all aspects of the business). As a company moves along the continuum, an increasing commitment of resources is required, which in turn generates increasing ability to influence the social landscape.

Due to space limitations, I can provide only two examples. These are cautionary tales from both a corporate and a social perspective.

 

Compliance: Doing Only What the Law Requires


For most companies, compliance means observing regulations that relate to environmental and employment issues. It may include additional regulation, particularly for food and drug companies. At the very least, every company can, or should, be fulfilling these obligations.

Unfortunately, not all do.

In April 2010, there was an explosion on the Deepwater Horizon offshore drilling rig in the Gulf of Mexico. Over the next 87 days, millions of barrels of oil poured into the waters south of Louisiana, Alabama, and Georgia and began pushing toward the beaches of Florida. Called “the BP oil spill”—a disturbing misnomer, inasmuch as it brings to mind images of spilled milk, say, as opposed to gushing crude—it became arguably the worst environmental disaster in American history.

In the late 1990s, under the leadership of CEO Lord Browne, the company made what appeared to be a serious commitment to the environment. With all the fanfare associated with social responsibility announcements, Browne admitted in a speech at the Stanford Graduate School of Business that global warming and climate change were serious global concerns—the first oil company executive to make such an acknowledgement. This was no small deal. Stanford is a business school with a long-standing commitment to responsibility, including publishing a leading academic journal the Stanford Social Innovation Review. This announcement thus did not go unnoticed or un-acted-upon. Between 1997 and 2007, BP reduced operational emissions, developed alternative energy sources, and was funding biofuel research. According to company estimates (a source we are unlikely to trust these days), BP reduced greenhouse gas (GHG) emissions by 2.4 million tons. BP Alternative Energy was launched in 2005, with a commitment to invest $8 billion over ten years in renewable energy sources like solar and wind power (and natural gas—a questionable inclusion in this list). A biofuels division was launched in 2006, including a $500 million commitment over ten years to the Energy Biosciences Institute at the University of California, Berkeley. While these investments seem like a substantial amount of money, one needs to take into account that BP earned $20 billion in profits in 2005 alone.

Over the same period of time, BP was becoming one of the largest oil companies in the world, growing from a $50 billion company to a $265 billion company in part through swallowing the likes of Amoco and the Atlantic Richfield Company (ARCO). It was also during this time that the company launched its Helios logo—a sunflower image embedded in green, suggesting happiness and friendliness to the environment. In addition, it changed its name from British Petroleum to BP, which in advertising was promoted as “Beyond Petroleum” and on the company web site was presented as standing for the newly combined company’s aspirations: “better people, better products, big picture, beyond petroleum.”

Despite its shiny, happy logo, BP has been a company fraught with problems for years. It was accused of price fixing in 2004. The following year, fifteen workers were killed and almost 200 more were injured in a Texas City, Texas, refinery explosion. This was followed by the discovery of burst and corroded BP pipes spilling more than 200,000 gallons of crude oil in Alaska (found because of governmental oversight, not internal corporate initiative), environmental hazards that led to escalating oil prices—resulting in record profits for BP2. BP “took full responsibility for its disastrous miscues,” something we heard again a few years later from Tony Hayward, the successor to Lord Browne and the man of many malapropisms.

In the summer of 2010—after the oil spill disaster—BP was hit with the largest fine ever imposed by the Occupational Safety and Health Administration (OSHA), in connection with its Texas City refinery. Initially, BP was fined $21 million for safety violations that led to the Texas City blast. Additional fines of $50.6 million have since been imposed on the company for 270 safety violations, and lack of compliance that occurred after the Gulf of Mexico oil spill disaster. This means that after millions of dollars in fines, the deaths of fifteen workers, injuries to scores more, plus billions of dollars paid to the families of victims, another billion spent since 2005 to fix the plant, and $500 million committed to bring it up to code, BP still was not in compliance.3

I include this illustration as a reminder that while compliance is basic, it is not simple.

 

Corporate Social Responsibility: Aligning Business with Social and Environmental Impacts and Reporting on it

Corporate social responsibility (CSR) requires an increased level of commitment on the part of the organization, and the charitable or social cause is integral to the work of the corporation.

From a meta-perspective, the issue with CSR (as opposed to social innovation, a strategy I advocate for) is that the focus is on (1) the corporation, and (2) the communications. It is a responsive model, not a pro-active one, and it tends to be about creating a campaign or an initiative or a product so that you can talk it up to the investment community. According to the consulting company KPMG, 80 percent of 250 global companies produce a CSR report, either as part of their annual report or more commonly as a separate document that appears on the corporate web site. KPMG expects this to become standard operating procedure.4

Here I provide an example of good marketing packaged as good works.

 

Clorox: Burt’s Bees and Green Works


Clorox bleach was first sold in 1913 and remains the Clorox Company’s most lucrative brand, accounting for $1.5 billion, or 28 percent of sales, in 2008.5 Bleach, Clorox or generic, is one of the most environmentally unfriendly products on the planet. Given this and the growing environmental trend, Clorox set out to “green” its image.6

In addition to household cleaning products, the Clorox Company produces a long line of well-known brands from Glad wrap to Hidden Valley salad dressing to Fresh Step cat litter. Its green line of products includes Brita filtration systems, Burt’s Bees, and a line of household cleaning products called Green Works, launched in January 2008. Here we’ll focus on the last two.

Burt’s Bees, perhaps best known for its beeswax lip balm, has a long history of success in the natural food health care marketplace. Burt’s Bees remained a small producer until 2004, when the company was sold to a private investor group. With the influx of funding, distribution of the products moved into mass-market outlets like supermarkets, chain drugstores, and mass merchandisers, in addition to smaller outlets like bookstores. The company’s growth attracted Clorox, which bought it in November 2007 and was able to further expand the brand’s distribution and improve performance by discontinuing underselling products.

In its sustainability report, Burt’s Bees claims, “Organic sources simply don’t exist for all the ingredients we need. . . for now, we’d rather be 100% truly natural than only partially organic.” The “natural” designation has no real merit. While “organic” is regulated, and specific benchmarks must be met in order for a product to use that designation, the same is not true of “natural.” Thus, organic is real; “natural” is marketing. Additionally, the company’s web site says it “commits to the highest standards of fair trade and working conditions in the sourcing of our products.” However, the products are not labeled as fair trade, because here too the company would have to prove it. More positively, the company is switching to post-consumer-recycled (PCR) materials and eliminating shrink wrap; its factory in North Carolina was made 100 percent carbon neutral, and it established The Burt’s Bees Greater Good Foundation in 2007, which donates at minimum 10 percent of profit from its web site sales to charity.

While Burt’s Bees increases the Clorox Company’s credibility in the health care category, the creation of Green Works has propelled the company’s environmental image in the household cleaning segment. Green Works sells a variety of products, including an all-purpose cleaner, a glass and surface cleaner, and a hand dishwashing liquid. These products bear the Clorox logo—a key indicator that the company is looking to reframe the image of its main brand. Like BP’s, Green Works’ packaging and marketing colors are white, yellow and green.

Within two years, Green Works was the leading natural household products brand, with $200 million in sales and 42 percent of the market. It more than doubled the size of the eco-friendly cleaner category. A key reason for its success is its ability to undercut the prices of its competitors. Green Works products cost 10–20 percent more than conventional products, while smaller producers have to charge 60 percent more.

From a consumer perspective, Clorox was able to tap into the environmental market with consumers who might not lean toward green products. Love or hate the bleach, Clorox is a trusted name and helped bring new people to the category.

As for the products themselves, they are “99% natural,” which we know means very little. The company does list the ingredients on the bottle, something that is not done for most household products. As noted by Treehugger.com, a respected blog on environmental issues, “while that’s better than using petroleum-derived alternatives, there are still major issues with rainforest habitat destruction relating to harvesting coconut oil and all sorts of issues with corn-based ethanol [ingredients included in Green Works products].”

Clorox attempted to ward off critics from the start. One way it did this was with the FAQs on its web site, which include the following:

“Is Clorox merely jumping on the green bandwagon?”

Answer: “We’ve been working on natu ral products for the past 5 years. We set ourselves a difficult task—to set the standard for natural cleaning and create products that clean with the power you expect from Clorox….”

The other far more controversial method was to get the endorsement of the Sierra Club, whose logo appears on all Green Works packaging. In exchange, Green Works helps to support Sierra Club’s conservation efforts. In 2008, Clorox donated close to half a million dollars to the Sierra Club. The “alliance” between these two organizations is problematic. Nonprofit organizations are not allowed by law to endorse consumer products. So if you look closely you will see that while the products bear the logo (the only thing that consumers are likely to see and read), small print states: “Sierra Club logo is used with permission, which does not constitute sponsorship or endorsement of any company or product.” So the next question has to be: what is it there for?

Some would say that we should support Clorox in doing this work and taking the time and the research and development money to create better products. I might have included myself in that number, except for the fact that one of my interviewees told me that Bill Morrissey, the leading sustainability officer at Clorox, attends the trail of sustainability conferences promoting “what a great environmental steward Clorox is and how ‘not bad’ bleach is—that’s their message—bleach isn’t as bad as you’ve been told.” Clorox never would have made that bold move without having first created the image of being a more environmentally correct manufacturer.

The key difference between CSR and social innovation is the element of publicity and the true level of corporate commitment.

Social Innovation: Embedding Responsibility and Return on Investment

The newest incarnation of CSR is called social innovation, and it represents a philosophical shift in corporate do-gooding. It is an integrated web of corporate responsibility, sustainability, strategic philanthropy, cause marketing, and advocacy that is underscored by a holistic approach that embeds “doing good” into a corporation’s DNA. Embedding means to incorporate or contain as an essential part or characteristic and the idea is that this will allow corporations to think more broadly and act more creatively, while still serving the needs of stakeholders and the bottom line. Done correctly, social innovation improves corporate perception, reduces operational costs, and produces incremental revenues. Companies become more vested in committing to this practice because it shows a return on investment (ROI) and demonstrates real world impact. More important, because it helps the company—and now there are methods to demonstrate that it will help the company—it is more likely to do it and stick with it.

The key difference between CSR and social innovation is the element of publicity and the true level of corporate commitment: CSR is about telling everyone what you are doing (even when some companies don’t deliver on their press releases), whereas social innovation is about going about making a difference and then “getting caught doing something good,” according to John Rooks, president of the socially conscious marketing company SOAP Group.

 

What Should Business Be Doing?

I want to be clear that my critique exists so as to find real solutions to difficult problems; it is not about corporate bashing. While the Beyoncé Hamburger Helper campaign is misguided, for example, overall General Mills is one of the good guys. It donates a lot of money and product, which does help to reduce hunger in the short term. So, too, Beyoncé donates her time and money, and she does not have to do that.

However, with this initiative—and others like it—we need to stop looking at the marketing (which is after all illusion) and start looking at the cause (which is very much reality). Most of these campaigns deal with the symptoms instead of the root problem, because the root problem is not something that they can address: Hunger isn’t about not having enough food; it’s about not having a job and enough money to pay for food. Also, most of these initiatives are measured by the dollars donated or the number of volunteer hours; these are useless criteria. The real bottom line is results—the elimination of a carbon footprint, the number of people pulled out of poverty, or the number of jobs created. The goal is to move more companies toward social innovation and away from cause-related marketing campaigns—eliminate them completely if we can.

Adapted from Compassion, Inc.: How Corporate America Blurs the Line between What We Buy, Who We Are, and Those We Help, by Mara Einstein, published by the University of California Press. © 2012 by Mara Einstein.

About the Author

Mara Einsteinhas been working in or writing about marketing for more than 20 years. She has enjoyed stints as a marketing executive at NBC, MTV Networks, and at major advertising agencies working on such accounts as Miller Lite, Uncle Ben’s and Dole Foods. Dr. Einstein is the author a number of books, most recently Compassion, Inc.: How Corporate America blurs the line between what we buy, who we are and those we help (University of California Press, 2012). She is a Professor at Queens College (CUNY) as well as an independent marketing consultant. She often lectures on cause marketing, CSR and Social Innovation.

References

1. PRWeek/Barkley Cause Survey, “New Study Reveals: Men Really Do Have a Heart,” press release, November 3, 2010, www.prnewswire.com/news-releases/new-study-reveals-men-really-do-have-a-heart-106647888.html (accessed July 26, 2011).


2. Joe Nocera, “Green Logo, but BP Is Old Oil,” New York Times, August 12, 2006.

3. Melanie Trottman and Guy Chazan, “BP to pay $50.6 Million for Texas Safety Lapses,” Wall Street Journal, August 13, 2010.


4. KPMG, “Sustainability, Corporate Social Responsibility through an Audit Committee Lens (February 4, 2010), www.kpmg.com/LU/en/IssuesAndInsights/Articlespublications/Pages/Sustainabilitycorporatesocialresponsibilitythroughanauditcommitteelens.aspx (accessed August 10, 2010).


5. Packaged Facts, “Ethical Food and Beverage, Personal Care and Household Products in the U.S.” (New York: Packaged Facts, 2009), 311.


6. The Clorox Company Foundation (www.cloroxcsr.com/cc-foundation), created in 1980, donates approximately 2 percent of net sales to social and environmental issues.

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