How Brands Encourage Corporate Social Responsibility

How Brands Encourage Corporate Social Responsibility How Brands Encourage Corporate Social Responsibility
by Max Kelly
Since the inception of industrialization, economists have debated whether or not corporations have an obligation to their community beyond the goods and services that they offer. Corporate Social Responsibility (CSR) is an ethical standard of self-regulation within a company’s business model which could compromise some profits for the greater good. Milton Friedman famously interpreted this concept to mean that the sole responsibility of a company is to maximize profits for its shareholders, thus benefit ting society less directly. John Kenneth Galbraith, however, called for the emancipation of corporations from profit-maximization and competition by pursuing just societal causes. Friedman and Galbraith’s arguments have developed into an interesting middle-ground today: Not only are companies pledging their financial and emotional support to countless charitable causes, but they’re also making a profit by doing it. How did this happen? The answer lies in the power of the brand.

A brand isn’t just about a product – it’s about an image. Now more than ever, a company’s personality and ability to react in an up-to-date fashion are paramount to its success. Consumers are choosing brands for more than just price or convenience; they’re choosing based on what the brand stands for. In fact, according to BAV’s US study of the past year, 68% of the population are willing to pay more for products/services that care about improving the local community, 61% are willing to pay more for products/services that care about improving the environment, and 64% make it a point to buy brands from companies that hold similar values to their own. Brands are succeeding as a result of these consumer preferences: check out what Brand Analyst Hilary Martin found when comparing the Top 150 “Socially Responsible” (1 of the 48 BAV imagery metrics) brands with the S&P 500.


Since many businesses understand this growing trend in consumer behavior, they attempt to improve their public image by engaging in charitable acts and an ethical standard throughout their operation. TOMS is more than just a shoe company – it’s a foundation for putting a pair of shoes on every child in need around the world, with over 60 million donated since 2006. Microsoft employees raised a staggering $125 million for more than 18,000 non-profits last year. Target has improved its brand through a variety of means, including donating over $100 million to educational and wellness programs for children. Whole Foods, Trader Joe's, and similar niche food service brands made their marketing message first and foremost one that’s clean and green, shocking the industry and overpowering the established competitors’ brand equities.


The list goes on and on – nearly every major company proudly flaunts the way they give back. In fact, with the information age, companies are able to publicize their pro-bono work through a variety of media now available to consumers, including TV, Snapchat, Facebook, and their own website. The concurrent increases of a company’s good deeds and the number of PR opportunities is no coincidence. But now we’re on the verge of a debate about altruism… so let’s get back to good ol’ BAV. How does CSR affect a company’s equity? More specifically, how does it affect BAV’s Four Pillars?

Energized Differentiation -  A brand begins its growth with the way it stands out from its competitors. Many consumers hold a negative bias towards corporations, viewing them as entities without a care for anything besides profits. Taking a stand against this stereotype and offering a refreshing and caring image could truly make a brand unique. For example, Newman’s Own (which donates 100% of its after-tax profits to charity) is one of the strongest brands within the packaged food industry.

Relevance – Since consumers now generally care more about the values of a brand, relevance is likely to increase if a company engages in CSR. If a brand aims to increase relevance among a specific demographic, they can research what matters most to that demographic and capitalize on it. Google used this strategy well when they noticed a significant disparity between male and female coders, and they now offer programs around the world to encourage women to code. Not only are they gaining appreciation and relevance from most women, but they’re also growing the number of potential employees in their future and helping break gender barriers.

Esteem – Trader Joe’s is a good example of how CSR improves the Esteem pillar. People view Trader Joe’s as a well-regarded brand because of what set them apart – their ethical high quality food and trusted customer service.

Knowledge – CSR has become an invaluable tool for marketing, both in media and through word-of-mouth. Dove capitalized on the growing discontentment of body standards in media by releasing their Campaign for Real Beauty, showing un-edited models with more realistic physiques. Dove took a bold stand for body positivity, and the country took notice. I don’t know about you, but my Facebook newsfeed has been frequently populated with Dove’s campaign. Social media users were advertising for Dove free-of-cost, simply because they identified with Dove’s message. With ethical values, a company has more opportunities for marketing and more reasons to be proud of what they do.

However, many are still skeptical about companies being a true force for positive change – sure, they can talk the talk, but would they walk the walk if no one was watching or if profits would suffer? There are certainly many examples of companies being dishonest or manipulative with their image (ex: “green-washing”), but I still believe we are on an upward path of progress in Corporate Social Responsibility. Friedman and Galbraith would be pleasantly surprised if they saw the harmony of CSR and profits that have come to fruition today.  Corporations are realizing that an honest set of values for the greater good leads to a higher brand equity, which leads to greater profits, innovation, and growth – and in the process, demonstrating to other companies how ethical standards impact everyone.







All Content © 2017 BrandAsset Consulting

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