Has Tim Hortons given up on sustainability?

"Making a True Difference" has been Tim Hortons' slogan animating its social responsibility and sustainability initiatives over the past few years. But since they were acquired late last year by Brazilian private equity outfit 3G Capital, the owners of the fast food chain Burger King, the true difference seems to be that sustainability is suddenly in rapid decline at the iconic Canadian coffee chain. The new owners, promising to cut costs and improve performance, have effectively closed down the company's sustainability department.

The change has been pretty dramatic. Just last year, the then CEO of the company was saying that their "overall vision for sustainability is to be a leader in the North American quick service restaurant sector and across all sectors in Canada". Already well-known for their community initiatives, the company  had upped its game over recent years in a number of key areas including sustainable sourcing, recycling, energy and water efficiency, animal welfare, nutrition, and disclosure and reporting. As a result it had made it into the Dow Jones Sustainability Index, Corporate Knights magazine's Global 100, the Carbon Disclosure Project's Leadership Index and various other best-of sustainability lists and rankings. The company was far from perfect, but it was clearly making progress.

Since the turn of the year, however, a lot has changed. The new owners have instituted swingeing cuts in personnel in order to institute "efficiencies", just as they did at Burger King a few years ago. As is so often the case, sustainability and responsibility has been one of the first areas to feel the heat. In addition to jettisoning the dedicated sustainability team, the company appears to have also cut the budget for various corporate responsibility initiatives. There's not much sign of a company aiming to be a sustainability leader any longer. Not unless you think Burger King is a leader that is.

So what to make of the changes? The are at least two things worth noting.

First, it seems like the new owners are convinced a lot of Tim Horton's sustainability initiatives were simply not adding value to the company - or at least not to the share price. This is always a major issue for sustainability champions to address, but is typically tricky to prove either way. Still, the swift move to cut the whole department hardly suggests a careful financial evaluation from the new owners either. 3G Capital seem to be operating on gut instinct (or maybe just ideology) much more than evidence when it comes to the financial value of sustainability.

Second, the quick serve market is increasingly being bifurcated into higher end 'gourmet' brands like Chipotle or Starbucks that see sustainability as part of their superior quality proposition to customers and lower end brands like Burger King or KFC that focus more on price and so seek to minimize the costs of sustainability. The new owners probably saw Tim Hortons as somewhat stuck in the middle (much like McDonald's have become), and have elected to head down the low-end route in order to maintain their strategic focus. This certainly makes some sense from the perspective of competitive strategy, and could see the company pulling back from a lot more than just sustainability as it reins in its costs across its operations. If so, we can expect to see simpler menus and a back to basics approach after a recent period of experimentation with higher end fare. However, if this is the way they want to go, you would expect to see more, not less, attention to the costs savings that sustainability initiatives can bring through more efficient resource utilization. As Wal-Mart has shown, sustainability can also very much be part of a low cost strategy.

All told, things don't look for good for sustainability at Tim Hortons. Although some firms can manage sustainability well with just one or two core staff by integrating responsibilities within other parts of the business, Tim Hortons seems to be more intent on stripping it down as far as possible as part of a broader strategic reorientation.  However, there is at least a slither of good news for sustainability enthusiasts in all this. As part of the cutbacks, the new owners have also put the company's private jet up for sale.

Photo by Jeff M For Short. Reproduced under Creative Commons Licence

Who will be the business ethics winners and losers at the London Olympics?

Corporate involvement in the Olympic Games continues to expand in size and significance. This year, the 2012 London Olympics will boast sponsorship on hundreds of millions of dollars in corporate sponsorship and tie-ins. But as the corporate money flooding into the Games increases, so too do the attendant ethical risks. For all the advantages of being associated with one of the world's greatest and most watched sporting events, it also puts you at the mercy of activists and other critics ready to use the Games' huge pulling power to target big brands. Adidas, BP, Dow Chemical, McDonald's and Rio Tinto are all currently in the firing line regarding their involvement in the London Games. So the big question for the companies is: come closing ceremony time, who are going to be seen as the ethics winners and who will be the ethics losers?

 Four years ago, the 2008 Beijing Olympics also brought to the fore some major ethical risks for the Games' sponsors, mainly because of the potential for being tarnished with the human rights and environmental pollution problems facing hosts China. This time around, it is less the hosts than the companies themselves, accused of anything from using their sponsorship to greenwash their more unsavory practices (BP, Dow), to corrupting the ideals of the Games (McDonald's), and exploiting sweatshop labor to produce official Games sportswear (adidas).

The most tangible of these criticisms regards the sweatshop allegations. Over the years, adidas has worked hard on its ethical supply chain practices, and was one of the forces behind the Sustainable Apparel Coalition initiative. But having already dropped off one list of the most ethical companies this year, the accusations of poor labor practice in the factories producing the official kit for the Great Britain Olympic team will no doubt strike a significant reputational blow to the company.

Let's be clear here. It's unlikely that adidas is actually an outlier amongst apparel companies. A decent investigation into pretty much any global brand's supply chain could probably surface some major failures to live up to their impressive sounding codes. Not because they don't want to meet their commitments, but because there are always going to be suppliers that cut corners given the low cost, high flexibility model of production foisted onto them by the big brands. Adidas becomes a useful target though because of it's high profile in the Olympics. That's the risk that comes with the territory these days. Nike got it right 4 years ago when they published their special report on their Chinese operations months before the Olympics took place thereby taking any sting out of any likely exposé.

As for the so-called green washers, they also shouldn't be too surprised about the controversy they have sparked. BP as an official "sustainability partner" for the Olympics? Wouldn't it make sense to get your sustainability reputation back before wrapping yourself in such a cloak? Maybe they think that at rock bottom the only way you can go is up. But public trust needs careful nurturing if you are going to restore it after a major catastrophe. Not symbolic gestures.

If anybody should know how hard it is to rebuild public trust, it's one of the other Olympics sponsors currently in at the losing end of the PR battle, Dow Chemical. The beef with Dow goes back to 1984, and to a company that they didn't even acquire until 2001, Union Carbide. That the compensation question for Union Carbide's role in the Bhopal tragedy should still be rumbling on is testament to the importance of dealing effectively with legacy ethics issues. Here we are nearly 30 years later with Dow's banner role in the Games being the subject of front page news in India, the UK and elsewhere.

There's already been a high profile resignation from the watchdog supposed to monitor the sustainability of the 2012 Games as a result of the company's sponsorship deal, whilst over in India, the Government itself has now launched a diplomatic offensive against the company after it failed to persuade the London Olympics Committee to drop the firm as a sponsor. There has even been talk of a national boycott of the Games by India, but this currently looks unlikely. 

Let's get this one clear too though. Dow is no evil corporate monster, and has been doing some fine work in the sustainability space. But it does have a legacy problem still to deal with. And until it reaches a more easy relationship with key opinion formers in India (which, frankly seems unlikely in the near future given all that has happened ..... and when the response of the CEO to the current troubles is that any opposition to their sponsorship is "beyond belief"), it should just steer clear of huge global events like the Olympics. Any PR firm worth it's salt should know that. The $10m sponsorship money could have been spent in much more effective ways. Why take the risk of stirring up old problems - and more than that, give them a global airing - when you don't need to? Hubris, insensitivity, poor research, or just bad PR? It would be interesting to find out.

The bottom line is that the Olympics offers great opportunities for corporations to connect with a global audience. But those opportunities do not come risk free. Companies need to have their reputations in their best possible condition before they take such a plunge. And they need to have the PR department, the CSR team, risk management, and the senior leadership working together from the get go to minimize any damage.  Just ask any Olympic athlete. Winning at the Games is all about preparation, dedication, commitment, and having the right team in place to get you there. Business should be no different.

Photo by the|G|™. Reproduced under Creative Commons Licence

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Why is communication such a big deal for CSR?

Corporate social responsibility often provokes a lot of debate. But one thing that most people seem to be agreed on is the necessity of good communications. Of course, what makes for "good" communications is not so clear cut. Should companies engage in dialogue and debate with their stakeholders? How do you communicate "authentically" with consumers around social issues? And what do employees expects or want in terms of internal communication around CSR? These are some of the questions occupying minds rights now, so it has been interesting to spend the last couple of weeks exploring some of the challenges around the intersection of CSR and communication, both from a research and practice perspective. Not that this has necessarily brought me any closer to the right answers, but I think it has helped a lot in clarifying what the right questions might be.

Last week I keynoted the 1st International CSR Communication conference in Amsterdam, NL, a primarily research conference that also featured a lot of practitioner participants. This was preceded by a doctoral workshop on CSR and communication research where budding PhD students sought to test out their ideas, theories, and methods with experienced researchers like myself and Mette Morsing from Copenhagen Business School. Then, this week I keynoted another pretty unique conference - a mixed practitioner/research conference in Copenhagen on CSR and social media titled "Social media for social purposes".

Suddenly it seems that the communications challenges in CSR are getting a lot of attention. Certainly they are beginning to attract a lot of research activity, whether from management researchers, communications scientists, or media analysts. There is some really interesting stuff happening out there, much of it making use of the new online data that is all around us. I've been impressed by some of the datasets that are being put together using Tweets, blogs, YouTube videos, media articles, and a variety of online texts and reports. The possibilities of analyzing "big data" around online CSR communication are growing all the time. But also, it is clear that we need more than just huge amounts of data - we also need to be asking the right questions.

Consider this. McDonald's, which has been a pioneer in blogging about its CSR practices through its Values in Practice blog, has recorded the following stats from January - November 2011:

Number of posts: 16.
Average number of comments per post: 0.5
Average number of tweets per post: 1.2
Average number of Facebook likes per post: 3.1
Average number of shares per post: 3.8

Now consider this. McDonald's has more than 11m people who have "liked" the company's main Facebook page. That's a lot of people who don't seem to be much interested in what is happening over at their CSR blog. Clearly something is up. CSR experts are saying that companies need to engage in dialogue with their stakeholders. So are McDonald's stakeholders actually not interested in dialogue? Is the way the company is communicating not relevant for them? Is the company blocking interacting on some way or is one way communication actually effective here?

As I say, we don't really have the answers to these sorts of questions yet, but the field is moving fast and through network, discourse, and sentiment analysis, for example, researchers are getting a better understanding of how and why people respond to CSR communications in particular ways.... and what this all means for the society we live in today. There is a long way to go, but it looks like its going to be an exciting and informative journey.

AC

Photo by joshfassbind. Reproduced under Creative Commons licence

Shooting straight at Target?

Target, the American discount retail giant that has for years been trying to claw market share from its mammoth rival Wal-Mart, was generally regarded as a more socially responsible alterntive to its big box competitor. That started to change with Wal-Mart's sustainability u-turn a few years ago, prompting Fast Company magazine to recently proclaim Walmart the winner in the "sustainability face-off" between the two companies.

One area of social responsibility where Target has continued to outpunch its rival though has been in diversity and human rights. For example, Target scored a maximum 100 points in the most recent Corporate Equality Index published by Human Rights Campaign, the largest national lesbian, gay, bisexual and transgender (LGBT) civil rights organization in the US. Among other things, Target extends its employee's health care coverage to same-sex partners. Wal-Mart, by comparison, until recently provided coverage to less than half of its own employees never mind their partners. It scored just 40 on the Index.

However, in the last two months, Target's carefully nurtured diversity reputation has begun to unravel. It is now in the midst of a boycott from LGBT customers, appears to have seriously angered many of its once loyal employees, and has even had the social media campaign for the launch of its fall clothing line derailed.

The cause? A relatively innoculous looking $150,000 campaign donation in the upcoming 2010 Minnesota Governor's Race. Target made the donation to MN Forward, a political action commitee which describes itself as "established to ensure that private-sector job creation and economic growth are at the top of the agenda during the 2010 campaign" . The group works to solicit campaign donations from  "Minnesota job creators to elect candidates from both parties who support policies that enhance job growth".

So far, so uncontroversial. Target is among a number of Minnesota-based companies contributing to MN Forward, with a view to backing candidates making job creation and support for business a priority. The group is putting its corporate money behind the Republican candidate Tom Emmer in the Governor's race. And they make no bones about why: "As a legislator, Tom Emmer voted against job-killing taxes and for reduced government spending. Emmer voted with the Minnesota Chamber of Commerce 91% of the time". You can't get much more pro-business than that. So it's hardly very surprising that Target is willing to cough up a few readies to get their man in poll position. So where's the rub?

The problem is Emmer isn't just about supporting business. He's also about supporting marriage. Traditional marriage. As in, not gay marriage. All of the other candidates are in support of legalizing same-sex marriage in the state, but Emmer has been a staunch opponent of LGBT marriage rights. As he says on his campaign website: "I believe marriage is the union between one man and one woman. As a legislator, I have consistently supported the constitutional marriage amendment that protects traditional marriage.”

There's more, as the Minnesota Independent newspaper documents well:

"In 2007, Emmer authored a constitutional amendment to prohibit same-sex marriage and civil unions. In many instances, Emmer has tried to change language in bills to that same-sex couples cannot benefit. In a bill to create standards around surrogate motherhood, Emmer attempted to replace the word “parents” with the words “mother and father.” In a wrongful death bill this session, Emmer questioned the use of the term “domestic partner” just as he has in bills aimed at providing benefits for same-sex partners. Emmer has also been criticized for his association with Christian hard rock ministry, You Can Run But You Cannot Hide Intl., Inc., which has made incendiary statements about the morality of imprisoning and executing homosexuals. Emmer’s campaign had purchased table space at the group’s fundraiser and visited with the group on the radio and in person."

Ah. So, not exactly a poster boy for Target's diversity policies then. The company, a regular supporter of the local gay pride festival, is more used to being recognized for its leadership on LGBT issues. So given this kind of backstory it is perhaps no surprise that the company's campaign donation has ignited a bit of a storm. Gay rights organizations have been up in arms, various facebook campaigns have been started, and protests have been held outside of the firm's stores. Boycott plans and employee unrest have followed.

Initially, Target was unrepentant. The CEO's response to staff was an email largely dismissing the problem. In the mail, he wrote: "We rarely endorse all advocated positions of the organizations or candidates we support, and we do not have a political or social agenda. As you know, Target has a history of supporting organizations and candidates, on both sides of the aisle, who seek to advance policies aligned with our business objectives, such as job creation and economic growth...Let me be very clear, Target's support of the GLBT community is unwavering, and inclusiveness remains a core value of our company."

However, fearing an escalation of the storm, earlier this month Target's CEO issued an apology letter to employees, remarking that "while I firmly believe that a business climate conducive to growth is critical to our future, I realize our decision affected many of you in a way I did not anticipate, and for that I am genuinely sorry." This seemed to stem the tide of protest, but the story has yet to go away for the troubled retailer. Last week, the Human Rights Campaign (yes, the group that gave Target the 100/100 score for their equality policies) announced that the company has refused to "make it right" to the LGBT community by retracting the donation or making a matching $150,000 donation to a gay rights organizaton. HRC said it would be making a $150,000 donation itself to elect a pro-equality governor.

We doubt ths will be the end of the story. But what can we learn from events so far? One clear conclusion is that the recent Citizens United ruling in the US that gives private corporations the right to fund political broadcasts during elections is not going to be a field of roses for companies. Whilst it may guarantee them free political speech, the question is will they necessarily want to use it given the dangers of upsetting their many and varied stakeholders? Big brand companies especially will probably want to be proceed with politics very carefully and not without due dilligence - as Target have found to their cost.

Secondly, companies will need to get smarter about how to engage in identity politics. It is no use saying "we don't have a political agenda" when you've invested in supporting minority or under-represented groups such as LGBTs, racial minoroties,or the handicapped. The decisions may be driven by business concerns but that doesn't mean that they don't have political ramifcations. And identity-based organizations know this and are ready to exploit companies' naivety. McDonald's have already been burnt on a simialr issue, as we reported a couple of months ago. And if you want to read more, we've recently written a couple of downloadable academic papers focusing on corporations and identity politics and how to bring identity afiliations into stakeholder identification.

The point is that companies are not yet very skilled at joined-up thinking across their span of operations when it comes to issues like gay rights - or any number of other issues that reflect people's complex and multi-faceted identities. Target is learning to thnk about LGBT issues not just in relation to human resources, but also in marketing, investor relations and government relations. Next it could be Muslims, Mexican immigrants or Mothers Against Drink Driving pointing out their inconsistencies. Or perhaps the American Family Association will start boycotting them now that they've heard about all that pro-gay stuff Target were doing. Then we'll really see if the company has a political agenda.

McDonald's comes back out of le closet

The fast food chain McDonald's has recently released an interesting TV ad in France featuring a young gay character talking with his father. It's notable not just because it features a gay character in a big multinational company's commercial, but also because the character is actually hiding his sexuality.  You can see the spot with English subtitles here:



The ad has gained a lot of online attention. The spot itself has been seen by nearly 2m people on YouTube and there are countless sites (including repostings on YouTube) where commentators have made their views known about the ad. These views range from a positive appreciation of McDonald's for acknowledging the gay community to some pretty nasty homophobic vitriol. Somewhere in between there are those who are asking why a fast food company should even be mentioning someone's sexuality, and those that are questioning whether McDonald's is trying to reach out to a new, and potentially prosperous targt market. As we have explored in a recent paper (downloadable at SSRN), corporations have increasingly been involved in identity politcs, and this raises a number of critical debates about the intermingling of business and politics.

To understand the significance of McDonald's 'gay ad' though, we need to put it in context. The ad is one part of a larger campaign launched by the company last year featuring the strapline 'Venez Comme Vous Etre' (Come as You Are). The campaign includes film and print ads, viral videos and other stuff. The basic message of the campaign is everyone's welcome at McDonald's, however you're dressed, whatever your age or race. And whatever your sexual orientation. The official company line is that series "recognizes the diversity of McDonald's customers in France."

It's all part of the cosmopolitan identity that multinationals like McDonald's are increasingly seeking to create. Remember that not that long ago, anti-globalization campaigners in France saw McDonald's as a symbol of American big business and global injustice - and were wrecking their restaurants from time to time to prove the point. So in that context a campaign that presents the company as a broad church that welcomes one and all makes a lot of sense. So much so that in food-loving France, the chain enjoys growing popularity and has become, according to The Times newspaper, the country’s ‘worst-kept dirty secret’. Everyone loves McDonald's (at least that's what the company is telling us). Even gay people. Even closeted gay people. And even clueless Dads.

It might seem odd that the company has chosen to portray a young man who is cute and confident, but at home at least, firmly in the closet. Why not present an out and proud gay character? One answer could be that the company is looking to represent a realistic picture of gay identity, not just a handy stereotype of sugar-coated camp beloved of Hollywood. It's also worth remembering though that back in 2008, McDonald's got itself in a bit of hot water back home in the US over its purported support of the gay community. Following a $20,000 sponsorship donation and the appointment of a McDonald's VP to the board of the National Gay & Lesbian Chamber of Commerce (NGLCC), the American Family Association (AFA) and other groups from the christian right called a boycott. The company had refused "to stay neutral in the cultural war over homosexuality" the AFA claimed, and was "promoting the homosexual agenda, including homosexual marriage."Eventually McDonald's duly pulled out of its support of the NGLCC.

 McDonald's American experience shows just how problematic it can be for companies to get involved in representing different minorities. It can place them in a world of identity politics that they are unprepared and ill suited to deal with. Promoting diversity or targeting the lucrative gay market may make good economic sense, but its also a political act with political implications. Pro- and anti- groups may both use corporations to help them achieve their political goals, just like the NGLCC and the AFA have. McDonald's may claim it is simply about diversity and inclusiveness but others see it as the frontline of identity politics.

So this may help to explain the somewhat ambiguous messaging of McDonald's"gay ad" in France. The company is putting out a welcome whether you're in or out of the closet, or even if, like the father in the ad, you don't recognise or support gay identity. Come as you are, as they put it in the campaign.

That said though, running the ad is quite a risk for a company still smarting from a controversial boycott that riled up a significant chunk of their core customer base in conservative middle America. As several commentators have suggested, the ad is unlikely to run in the US, but even so it's starting to cause waves, as this clip of Bill O'Relly shows. The company can hardly be pro gay in France and neutral in the US. At some stage, like it or not, the embracing of diversity means you just have to take some kind of political position. As much as companies like McDonald's may be more comfortable talking economics, they simply can't afford to ignore the politics.


Photo by Márcio Cabral de Moura. Reproduced under Creative Commons Licence

World's stupidest Gaza boycotts?

As a follow-up to our last post, this interesting blog entry from the folks at Foreign Policy may raise some laughs .. or a few hackles. The comments are interesting too. Thanks to Kejia for alerting us to this one...


The world's stupidest Gaza boycotts

Predictably, Israel's continued assault in Gaza has led to renewed calls to boycott Israeli products. Everyone has a right to express their political views any way they see fit, but it's safe to say that some proposed boycotts are less productive than others.

More than 2,000 restaurants in Malaysia have removed coca-cola because of the United States' support of Israel. The Malaysian Muslim Consumers Association has also pushed for boycotts of Starbucks, Colgate, McDonald's and Maybelline in order "to protest Zionist cruelty."

Coca-Cola is a particularly odd target since it's bottled and sold locally by a Malaysian-owned company, so the activists are really just hurting their own country's economy. (I remember from college that students campaigning for a campus boycott against "killer coke's" Latin American business practices faced the same problem.) It's also ironic given that the company was once criticized as anti-Semitic because of its reluctance to break an Arab League boycott by selling coke in Israel.

Post continues ....

Corporate engagement through CSR blogs?

One thing we've been taking a look at recently is the development of CSR blogs written on behalf of companies, usually by a senior CSR executive or team. Although there do not appear to be a large number of them about (or at least if there are, no one's reading them and they're not appearing in our not-very-scientific Google searches), the phenomenon does seem to be gaining some momentum. Probably the most well known is the McDonald's blog 'Open for Discussion' which launched back in 2006, but CSR blogs have probably been most conspicuous amongst technology companies, with the likes of Intel, Sun Microsystems, and Lawson Software all launching CSR blogs of one kind of another. Although IT companies may not be the most prominent in the CSR and sustainability world, especially compared to fast food companies like McDonald's, there are clearly a whole range of responsibility issues that the industry is having to deal with. The interesting thing though is that they are choosing to use their technology focus to develop new ways of engaging with stakeholders through the medium of blogs.

OK, so in reality, the CSR blog is not a major breakthrough in the development of stakeholder communication, but it does represent an attempt to connect with people about responsibility issues in a potentially more personalized and interactive way than corporate reports, press releases and TV commercials. As Intel claims, it is an "intent to create greater transparency through open dialogue". Or, as McDonald's puts it: "Get personal perspectives on the issues, hear open assessments of the challenges we face, and engage in civil dialogue with the people behind the programs at the Golden Arches."

Clearly the rhetorical emphasis here is on dialogue, although according to our reading, there doesn't seem to be too much real conversation going on. Much of the content in these is mainly about presenting the corporate position on CSR issues, but simply using another channel of communication to do so. The titles of two recent McDonald's blogs on "What my little league days say to me about the root causes behind obesity" and "An alternative perspective on larger-scale agriculture" won't leave anyone guessing that the answers are in any way in doubt - i.e. fast food is not to blame and big agriculture is good for us.

Other CSR blogs take a different approach - the law firm Addleshaw Goddard, for example sets out "the mental meanderings of our CSR Manager" as more of a diary for its CSR programme than anything else. And the Lawson "Frankly CSR" blog is also somewhat idiosyncratic, but actually says relatively little about the firm's program. It focuses more on what the VP is currently finding interesting in the CSR world.

So there are clearly different ways if going about this. Our view is that the more corporations simply use CSR blogs as another vehicle to "get their message out", the less successful they will be. We already hear enough about what they are doing. So it is not exactly surprising that most CSR blogs, even for major corporations like McDonald's, seem to get relatively few comments. As Bob Langert, the company's VP for CSR said in response to a comment on the blog recently: "I wish we received more comments". But from our perspective, this isn't likely to happen so long as Langert persists in thinking that :

"Poor perceptions of McDonald's are frequently the result of a lack of information. People need easy access to information about our social and environmental policies and progress so that they can draw conclusions based on facts. "

People are not looking for more information, and corporations suffering from "poor perceptions" should not be deluded in thinking that more information will solve their problems. Corporations need to engage with people in a different way - a way that treats their concerns seriously, that seeks to find common understandings and solutions, and that, yes, genuinely engages in dialogue. CSR blogs hold some potential for this, but at the moment, it is not being realized effectively. A change in mindset is required, not simply a change in communication channel.

But don't go thinking that we don't see anything positive in the current CSR blog phenomenon. There are some interesting discussions starting to happen out there. And perhaps most of all, what is pretty refreshing is to get a real person, an individual with a name and a face, writing about a company's CSR activities. With personalization, with a "moral face" even, there is greater potential for a meaningful ethical shift than with the bland bureaucratic messages of the faceless corporation. Plus, they tend to have a lot more fancy technological finery than our rudimentary efforts...

Fat chance for CSR

Regular readers of the Crane and Matten blog will be aware of our ongoing interests in social responsibility and self regulation in the food industry. Few subjects arouse as much debate as the stuff we put on our plates every day, the things that make us fat or thin, healthy or unhealthy … and of course the role that corporations play in enabling or preventing us from making informed and sustainable choices about food consumption.

So it is with some interest that we can report that this week saw the introduction of the first bill in the US that requires food outlets to display the calorie contents of their products on menus (see the recent newspaper article in The Guardian about this for more details). Yes, New York City has defied the vigorous campaigning of the fast food industry to put in place regulations that will ensure that customers in the city will no longer have to scrabble through the desultory rack of in-store nutrition leaflets or wade through the games and promotions on the corporate website in order to work out just how many calories that bucket of fried chicken and fries is going to pack.

Regulation of course is somewhat anathema to some (but not necessarily all) in the CSR world. Proponents of social responsibility typically promote self-regulation by business as a preferable alternative to government-imposed legislation. But in the hard fought battle of the bulge in New York, the city’s restaurant chains have been reluctant to introduce more far reaching CSR initiatives that may have staved off today’s regulation.

So from our perspective, the new legislation represents something of a mixed blessing. Sure, customers should be able to make informed decisions on the basis of readily available, easily comparable, and ultimately relevant, information about their prospective purchases at the point of sale. The New York legislation clearly has the potential to deliver this, providing restaurant chains live up to the spirit as well as the letter of the law. And, most importantly, such information is critical to the enabling of what we discuss under the label of ‘consumer sovereignty’ in our business ethics text. Basically, as the INSEAD professor Craig Smith has shown, the point is that ethical exchanges require consumers to have appropriate capability, information and choice in making their purchase decisions.

But, on the other hand, the New York regulations also, to some extent, a represent a failure on the part of the food industry’s CSR movement to get ahead of the game and work through a suitable industry-led alternative. Nutrition leaflets and website data are all well and good, but they hardly represent a creative and sustainable response to the health issues facing a society in the midst of a rapidly escalating obesity problem. McDonald’s, KFC, Burger King, Pizza Hut and the rest of the usual suspects have been talking the talk well enough, but in the end this wasn’t enough, at least not in New York.

Of course, the interesting question now is what will happen elsewhere, whether in other US states or further afield. Will the New York regulations act as a spur for more states or even countries to legislate? Will the food chains get their act together and instigate more responsible labeling programmes? Will we see new operators entering as-yet unregulated markets with information-led, nutrition-oriented value propositions, just as we have in the packaged food sector? Or, will all the fuss die down leaving fast food corporations free to scupper the new regulations before they have a chance to seriously take hold? The writing is on the wall, for sure. The only problem is, it’s just a little hard to read.

Giving olympic sponsors a sporting chance?

For those of you that have been following our entries on the upcoming Beijing Olympics, we thought this article, "Navigating Olympic Sponsorship: Marketing Your Brand without Alienating the World" from the Wharton School of the University of Pennsylvania might be of interest (thanks to Elizabeth Watson for alerting us to this one). It gives a good overview of some of the issues that the Olympics' corporate sponsors will have to juggle in the face of the political protests. As one of the Wharton professors comments in the article:

"Corporations that want to sponsor the Games have to navigate the political undercurrents ... I wouldn't be surprised if many underestimated the potential for [the Games] to turn into an international issue and thought instead, 'We can reach a billion eyeballs; the political stuff will just go away. But politics isn't about money. It's about hope and fear and common purpose and identity."

As the article rightly says, it is hardly surprising that the Games are a political focal point, and indeed, they often have been over the years. The difference now though is that the politics are far more embedded in economics than they once were. What with China being such an important trading partner for many corproations, not to mention the huge sponsorship deals involved, the incentives to avoid rocking the boat are there for all to see.

As we've already said, it's a little too early to tell what the consequences are going to be for the corporate sponsors, but one potential outcome mooted in the Wharton article may just be rattling a few nerves at Coca Cola, McDonalds, Volkswagon and the other sponsors. As anyone who has visited China will be aware, broadcasters in the PRC have a definite proclivity to black-out broadcasts at the slightest suggestion of anything controversial. After spending billions on sponsorship, the last thing the multinationals will want to see is a blank screen. Well, that's not counting the potential for "an unlucky photo or video clip of, say, Chinese police cracking a protester over the head in Beijing with a General Electric, Johnson & Johnson or Visa logo in the background". Unlucky? Or it just part and parcel of the heady brew of business, politics and sport?

I'd like to teach the world to .... eat?!

Probably the title of this post is lost on some of our younger readers, but it refers to a classic ad by Coca-Cola, where a multicultural bunch of young people with bad haircuts (well, it was the 70s) sing about peace, love and understanding in the guise of selling more soda, all to the tune of "I'd like to teach the world to sing". Beautiful. I don't know about you, but it gives Crane and Matten an urge to go grab a couple of cold ones from the cafe here just thinking about how much our friends at Coke have contributed to racial understanding and that great one-world vibe. Well, not counting the record breaking court fine for racial descrimination in 2000, their problems with water use in India ... oh and the fact that here we have a Pepsi-only exclusive concession!

But anyway, we digress. The point of the post is not actually to talk about Coca Cola, but about one of the other great giants of American global branding - McDonald's. Anyone that has read our Business Ethics textbook will know that we always like to see what's going on in the world of Ronald McDonald - there is always a meaty story or two to get our teeth into (if you'll excuse the pun). This time round, we are curious to explore what exactly it is that McDonald's hopes to teach the world. Probably not, as in the Coke ad, to teach the world to sing, but one thing is for certain, everyone's favourite fast food company is not content to leave the teaching to mere teachers.

First up, from this side of the Atlantic, news that McDonald's is pulling its ill-fated sponsorship of elementary school report cards in Florida (thanks to Ryan for pointing that one out to us). Yes, that's right, McDonald's was giving away happy meals as a reward for good grades, complete with a beaming picture of Ronald McDonald holding up the golden arches on the report card envelope. You couldn't make this stuff up. Critics rightly questioned whether McDonald's was sidestepping its own pledge not to advertise in elementary schools, whilst the firm countered that this was "not advertising". Oh, right, well that's OK then.

Only last week, we blogged about some of the issues around food companies self regulating their marketing to children, and this looks like a particuarly good example of where a stronger system is necessary to prevent companies breaking their own rules. As it turns out, the issue caused such a stink that the initiative was quickly dropped by McDonald's, who probably couldn't believe all the fuss since they had just taken over from Pizza Hut who had a similar promotion on report-card jackets for about 10 years. Perhaps the real question is how Pizza Hut managed to get away with it so long, but that's another story.

Not content with providing "incentives" to American kids for getting A's, from the other side of the Atlantic comes news that McDonald's is going to be offering high school qualifications to its staff in the UK. With the British Government looking to provide more practically oriented qualifications, as well as hoping to leverage some of the massive investment in company training into nationally recognized skills awards, McDonald's is one of three UK companies slated to run pilot programmes that will result in A' level qualifications for eligible staff.

Given that even the British Prime Minister himself, Gordon Brown, has said that the McDonald's A' level will be a "tough course", we clearly should have nothing to worry about. After all, he expects them to be ultimately suitable for entry into university. But even though we don't have a problem at all with complementing school education with practical training, there are clearly dangers here in equating a rather narrow company specific training course - however good it may be - with a decent high school education. Corporations quite naturally train people to work in the company's best interests, and unless students are also given the tools to put this training into a wider context, there is not much prospect for developing well rounded educated individuals. It is not that a McDonald's training scheme couldn't be part of this, but it would need to be effectively and imaginatively embedded into the curriculum to ensure that students are not short-changed by a government simply contracting out the educational process to "socially responsible" corporations. Maybe they should offer some free happy meals to anyone who makes a good suggestion for how to do this....