Is CSR dead? How millennials are driving demand for authentic brand purpose
EXCLUSIVE: By 2025, three-quarters of the UK's working population will be millennials that want to buy from companies that have a purpose beyond their products and operations. With that in mind, edie explores what comes next for the traditional CSR strategy.
A new report by communications agency FleishmanHillard Fishburn (FHF) revealed that 93% of the millennial generation want to buy from companies that have purpose, sustainability and environmental stewardship built into their ethos. FHF surveyed 30 senior sustainability and CSR professionals to gauge public attitudes.
The findings echo those of Deloitte, which claimed in 2016 that 56% of millennials will exclude companies that are not operating sustainably from their shopping lists, while 49% will refuse to work for companies that go against their personal ethics.
While these trends can only be a good thing for the global corporate sustainability agenda, they could soon create problems for companies that are failing to innovate their CSR approach in the age of social media, heightened consumer awareness and diverse brand choice.
In a bid to find out what the trends mean for the business community, FHF recently hosted a panel discussion in London, where Innocent’s sustainability officer Katie Leggett, production company RockCorps’ chief executive Stephen Greene, social research institute NatCen’s head of public attitudes Roger Harding and millennial activist Chidera Eggerue discussed a new wave of demand for brand purpose.
The panellists were in agreement that millennials have a higher expectation for companies to operate in a way which benefits society and the environment than their baby boomer counterparts. It’s largely due to advances in technology and the rise of social media, which has transformed the way that companies and consumers interact, the panel notes.
“Every generation has a keen sense of not wanting to be caught out, and, given that we are in an internet age where facts can be checked in seconds, millennials are particularly savvy in this respect,” NatCen’s Harding says. “This means they are also really in-tune with when a corporate really means the CSR work it is doing, and when it is greenwashing to look good – both as consumers and as employees.”
Harding cited the example of PepsiCo – which last year withdrew an advertising campaign after being accused of co-opting imagery of the Black Lives Matter protest – as a brand which had been “cancelled” by millennials.
Even the ongoing transitions to “green finance” and plastic-free packaging are riddled with cases that could be viewed as greenwash, largely because corporate pledges are yet to evolve into meaningful action.
Echoing Harding’s sentiments, Innocent’s Leggett argued that brands are now “widely expected” to have a holistic CSR strategy, and that companies who fail to do so are at risk of losing brand loyalty.
In this age of savvy, liberal and tech-literate young consumers, the panellists concluded that there is an increased risk of traditional CSR losing relevance and “dying” as a new age of holistic brand purpose is ushered in.
For Innocent, it’s not so much that traditional CSR is dying, but rather that is was never really born. Since the company was founded in 1999, it has never used the CSR term, instead focusing on a set of core values such as leadership and responsibility. The company is synonymous with health and wellbeing but its core business strategy has evolved to encourage staff to live a life that matches up to the company’s progressive green ethos.
“CSR is becoming a bit dead because it feels like an add-on, and what we are moving towards is something that feels more embedded,” Leggett told edie after the panel session.
“It feels like an afterthought – it’s something that seems very disconnected from the business. I’m not saying that it has always historically been like that, but it often is the case. I feel that being a truly responsible business is about having a holistic strategy which is always looking at wellness and sustainability in the round to create a benefit for the environment, staff and wider society.”
RockCorps is an example of an organisation that has turned its messaging into action. The platform offers tickets to exclusive concerts around the world. Instead of traditional payment methods, consumers volunteer to transform community spaces in exchange for tickets.
The company’s chief executive Stephen Greene explained that millennials will care about CSR if it moves beyond being a practice or a function.
“This generation typically asks for action to improve society and the environment to be made immediately, and not to be seen as a separate entity to day-to-day business,” Greene concluded.
FHF’s head of purposeful business Paul Afshar echoed this point by explaining that he had recently met young people who asked whether CSR was “something that companies do when they have done something wrong and they are trying to right it, with the expectation that they will get some kind of extra bonus”.
An ever-evolving approach
Clearly, if brands want to earn the loyalty of young consumers, they will need to move beyond actions that benefit their profits towards those that inspire social and environmental change.
The potential benefits of moving beyond traditional CSR to holistic brand purpose are vast. Innocent, for example, is now the biggest chilled juice brand in the UK and recorded a 23% year-on-year growth in turnover in 2017.
Elsewhere, sustainable fashion leader Patagonia doubled its 2010 sales to $800m in 2016 after pledging to give away all of its Black Friday sales to environmental charities. On the day this pledge was made, the company reportedly raised $10m and signed up 24,000 new customers.
Indeed, FHF’s own research found that 87% of millennials believe that the success of a company should be measured in terms of its social and environmental impact, as well as on its financial performance. All the signs suggest that businesses which fail to become purposeful will soon start to fall behind the rest of the pack.
Perhaps the clearest evidence of the growing demand for companies to adopt a triple bottom line approach is the success of the B Corp movement, which consists of more than 2,600 purpose-led businesses.
It was recently revealed that companies within the movement, such as Ben & Jerry’s and Propercorn, are growing 28 times faster than the national economic growth of 0.5%. To maintain B Corp status, these companies are legally required to consider the impact of their decisions on their workers, customers, suppliers, community, and the environment.
However, the panel agreed that not every company has been so quick to adapt, and urged those who wanted to become leaders to take an all-inclusive and genuine approach as soon as possible.
“Blending a commercial message with a social impact is still a relatively new and developing field, and it really is the young people that are leading this movement,” Greene said.
Greene noted that big brands have generally been quick to “hop onto” existing movements and co-opt them rather than embedding purpose in their operations as a quick fix – but that such a move was unlikely to be well-received by millennials.
“People are so aware of the concept of greenwashing in a way that they weren’t previously, so if you are saying you are sustainable or having certain values, then failing to abide by them, people will know you are not being authentic,” Leggett added.
“I guess there is a danger of businesses saying one thing and then doing another, but I would hope that they would avoid this because millennials will almost certainly not respond well to it. Business simply has to lead around sustainability and purpose, because we really don’t think politics will. If we want to be a business in 50 or 100 years’ time, we need to make sure that we are building a business that is fit for the future and that means integrating purpose.”
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