CSR: Why companies must more than ever go beyond corporate philanthropy

By Rajul Malde |

Rajul Malde, commercial director at Pwani Oil.
Businesses the world over are responding to the unpredictable health, social and economic aftershocks of Covid-19 in different ways.

The bottom line is that the pandemic has pushed firms to re-think their relationships with stakeholders - employees, customers, partners and communities. As responsible citizens, enterprises are expected to play their role in ensuring the safety and health of their stakeholders in these uncertain times. While businesses have in the past supported communities as part of their Corporate Social Responsibility (CSR), the onset and rapid spread of the new coronavirus has added impetus to such efforts. However, the focus should be on sustainability as opposed to mere philanthropy. The latter mainly entails short-term interventions, while the former includes strategic long-term investments in the well-being and prosperity of communities.

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Brands are crucial as part of the wider corporate social agenda. Businesses connect with consumers at the brand level. Moreover, consumers tend to view a brand as an extension of their lifestyles. Given the health impacts of Covid-19, brands should respond to consumers’ desire to keep safe and healthy, especially at this time.  
 According to market research firm Euromonitor International, health is the new lifestyle. But even before the pandemic erupted, consumer trends were increasingly shifting to the health and lifestyle benefits of products. Covid-19 has simply accelerated this shift as people seek to live and work in a safe and healthy environment.  

Positive value
Brands have been communicating the message of keeping safe through various media and online channels as enterprises enhance sanitary measures to keep employees and customers safe. But beyond preventive support, brands should promote healthy lifestyles as part of their value proposition to consumers.

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Health experts advise that a healthy lifestyle is key in boosting immunity to infections and improving chances of recovery. That said, companies are increasingly realising that the health and well-being of employees and customers are essential to the long-term sustainability of their businesses.

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There is growing evidence of a direct link between sustainability and higher brand value or equity. Activities aimed at improving the well-being of the stakeholders generate positive value for a brand. Sustainability also encompasses protecting the environment and adhering to the laws and ethics in doing business. Brands that show care for consumers, communities and the planet have a competitive edge. As Covid-19 has taught us, our behaviour affects the health and well-being of others. This is why we are obligated to observe physical distancing, wear face masks and regularly wash or sanitise our hands to protect ourselves and others. In the same way, brands must demonstrate concern for the well-being of people and communities.
As Michael E Porter and Mark R Kramer note in an article published in the Harvard Business Review:
“When a well-run business applies its vast resources, expertise and management talent to problems that it understands and in which it has a stake, it can have a greater impact on social good than any other institution or philanthropic organisation.”

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They further argue that no one is better positioned to create lasting, sustainable change than businesses. The payoff with consumers is immense.
A study by market research firm Nielsen in 2014 revealed that 55 per cent of consumers globally were ready to pay more for products from companies that have a strong commitment to positive social and environmental impact.
This is just one manifestation of what is called social licence – the goodwill a business enjoys among stakeholders. Many Kenyan firms have taken sustainability as a philosophy seriously. But we can do more, not only in supporting individuals and communities in need, by seeing to it that we create shared value for all.
Porter and Kramer describe creating shared value as identifying and acting on opportunities that spawn social well-being and economic prosperity.
While corporate philanthropy is concerned with the business impact on society, shared value is about achieving social and economic progress while seeking to maximise profit.
I am not in any way undermining the importance of CSR programmes. The point is, these need to be sustainable.
 - The writer is the commercial director, Pwani Oil