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Corporations find ‘responsibility’ sells

Jill Barshay Dec 11, 2007

Corporations find ‘responsibility’ sells

Jill Barshay Dec 11, 2007


KAI RYSSDAL: Whether it’s the local Safeway or some web-based e-tailer that’re collecting your embedded donations, part of what’s going on there is corporate America trying to earn some brownie points. Cashing in on the customer’s desire to do good. That’s a notion that extends beyond pure philanthropy. I’m sure you’ve seen ads about what this company or that is doing for the environment or for the local community.

Marketplace’s Jill Barshay reports, the idea of corporate responsibility has become an industry unto itself.

JILL BARSHAY: Rob Kaplan is Brown Forman’s senior analyst for corporate responsibility. Brown Forman owns Jack Daniels Whiskey and 36 other brands. Its corporate responsibility office is two years old. Kaplan is 29 years old. This is his first job since he graduated from Berkeley’s Haas Business School in May.

ROB KAPLAN: Corporate responsibility to me is about how we conduct our business, and really connecting these greater social values to our bottom line.

Kaplan is faced with a particular challenge — how to make a purveyor of sinful booze look like a paragon of civic virtue.

KAPLAN: So our products are made from corn, for example in Jack Daniels. So what are the agricultural impacts of that? Then the production process and the pollution or the water use. Then you move onto, you know distribution and marketing. How can we be responsible in our marketing with alcohol?

Companies of all sizes and in all sectors are embracing corporate responsibility, and they’re defining it in different ways. For some it’s a way to respond to accounting scandals, accusations of bad practices or protests against the way they do business. It’s spawned an entire new consulting industry, and now advertising, marketing and PR firms are telling their clients they can sell more products through corporate responsibility campaigns. Richard Edelman runs one of the largest PR firms in the country.

RICHARD EDELMAN: Increasingly we’re trying to find a larger purpose for corporate campaigns. So Ecomagination for GE for example, for the first time a major corporation was saying it’s smart business to be green. So the products are going to have to connect beyond a functional benefit, that they’re going to have to have some kind of bigger halo, something that they’re involved in.

Cheerleaders for the corporate responsibility movement say it could transform American business, but Steve Rochlin of Accountability North America says companies co-opt the concept of corporate responsibility to boost their public images. He’s been watching corporations try to clean up their acts for more than ten years.

STEVE ROCHLIN: It’s the height of hypocrisy. For example, for a company to take out an advertisement that is 10 times greater than the budget it is putting into a particular issue, cause or effort, and so we start to see that type of thing happen too often.

Rochlin worries that consumers will see corporate responsibility as just another public relations gimmick. He says if the concept is discredited, companies won’t even attempt to behave ethically or sensitively. Rob Kaplan at Brown Forman says he’s finding it a hard sell even in his own company.

KAPLAN: So you know, I’m in the corporate responsibility department, you know banging on doors and trying to get people to listen to me. Really the best way to make change is by incorporating it into a mainstream or traditional job function.

It’s happening slowly, or seems to be. American companies are making earnest statements about corporate responsibility, and Kaplan says many of his b-school buddies got jobs in the field. Hopefully their enthusiasm will rub off on their employers. Then perhaps American business really will change from the inside

I’m Jill Barshay for Marketplace.

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