Wednesday November 9, 2016

There has been a profound shift in the social role of business. Savvy consumers are researching the companies they purchase from, leading to demands for greater transparency. Some businesses have in turn adopted an approach to corporate social responsibility (CSR) that focuses on mitigating brand risks by avoiding socially questionable business practices—but are they missing a leadership opportunity?

Increasingly, consumers also look into a company’s core values, evaluating a range of practices from the sourcing of ingredients to the treatment of employees. According to a recent study by Havas Worldwide on the evolution of CSR, the “consensus is that businesses not only should play a larger role in solving social problems, but actually bear as much responsibility as governments for driving social change—and may even be better suited to the task.”[1] In the same study, global consumers indicated that “environmental sustainability was the cause deemed most pressing.”

Below is a summary of our panellists’ contribution to an engaging discussion on how sustainability is growing the social role of business.

Chris Coulter, co-CEO, GlobeScan

Chris Coulter built the context for the discussion using recent GlobeScan data from its public opinion and stakeholder engagement on the evolution of sustainable business in Canada. GlobeScan’s research from the past 20 years points to two important insights:

1. The Canadian public has high expectations for change.
2. They think government and business are not living up to their role on the environment, the economy, education, human rights, and aboriginal issues.

Over time, expectations for the role of business have been growing, but trust in business is as low as it has ever been in 15 years of tracking. It’s a difficult dynamic: people expect change, are looking for business to take action, but aren’t seeing how business is responding at a macro level.

Important points of context include: climate change – 400 parts per million of carbon in the atmosphere has been exceeded; fundamental issues surrounding water scarcity; increasingly high profile social challenges with vulnerable groups and inequality issues. These issues are the context that can form the basis of whether business can live up to Canadians’ expectations.

John Coyne, Vice President, Legal and External Affairs, Unilever Canada

Unilever’s guiding document is the Unilever Sustainable Living Plan (USLP). The USLP is a ten-year corporate strategy to double the size of Unilever’s business while cutting its environmental footprint in half. In other words, the USLP is both a growth strategy and an environmental set of principles and responsibilities.

The USLP requires measuring the social impact of three aspects of the business:

1. Commercial growth
2. Environmental responsibility
3. Social improvement

Unilever is measured in the marketplace for its business work and by the public on whether it can act as a credible spokesperson on these issues. In Canada, Unilever uses the #ucan campaign to articulate the social and environmental work that its brands are engaged with, such as the social responsibility of Ben & Jerry’s, the healthcare work of Becel, and the work with women and girls of Dove.

Any business plan requires honesty, authenticity and a clear mind about your business’ role. Unilever has been around for 140 years. The company was founded by people who very clearly articulated how they were twinning business and social purposes. Your business may not have sustainability embedded in its history but that isn’t essential to understanding how your business can evolve from what it is today.

Philip Gillin, Senior Managing Director and Portfolio Manager, Canadian Property Investments, Sun Life Financial

Sun Life Financial, founded in 1865, has been in business for over 150 years by taking a long-term perspective. A sustainability strategy can provide a framework to develop that perspective and to broadly engage with stakeholders, customers, employees and, in Sun Life’s case, its regulators. But that strategy needs focus to be actionable. To create that focus, Sun Life developed its four pillars of sustainability:

• Community wellness: actively supporting the communities where Sun Life’s employees live and work;
• Organizational resilience: ensuring the company will remain competitive, resilient and forward-thinking;
• Environmental responsibility: being accountable for the impact of operations on the environment; and
• Exemplary governance and risk management: creating a stable and sustainable operating platform for the company.

The tagline for the sustainability strategy—building healthy communities for life—highlights that people’s health, both physical and financial, is the priority.

One example of this strategy in action is the bullfrogpowered Alto Rentals community in Toronto. Located in a hip, transitional neighbourhood, it was designed as a test case to see how responsive the market is to an environmentally sensitive building. Alto is going for LEED silver and is the first non-smoking rental building in Toronto. The building is bullfrogpowering its common areas and subsidizing Bullfrog Power’s green energy for its tenants during the first year of their occupancy. Alto opened in April and was filled in four months instead of the planned 15, demonstrating that the market is looking for this type of product.

Josephine Coombe, Senior Vice President, Sales and Marketing, Bullfrog Power

The aspirational consumer segment is growing rapidly. In some cases, including Unilever’s and with Sun Life’s Alto Rentals, companies are developing richer product offerings with more social and environmental attributes to attract aspirational consumers. This trend extends from the grocery aisle, with the rise of health and wellness products, to experiential tourism and beyond.

Bullfrog Power recognizes that this consumer segment is powerful because they apply a wide-angle lens to products and services, engaging in a deeper interrogation of brands, including their social and environmental performance. This new relationship between consumers and brands has been driven in part by changes in media. Baby boomers were raised on a steady diet of one-way mass media messages that created a relatively uncritical audience. Today’s consumption of social media has developed a participatory approach to brands, enabling co-creation but also the potential to hold brands publicly accountable.

Brand marketers need to react. A beer company in the 70s might have focused on intrinsic qualities: it’s cold and delicious. Today, progressive companies, such as Bullfrog customer Granville Island, have a robust set of social and environmental programs because they understand the increased expectations of their consumers and they recognize the need to act. Brands need to craft that deeper narrative supported by authentic proof points to build trust and loyalty with today’s consumers.

Discussion Point: Culture travels

1. Coyne – Unilever’s growth agenda led it to acquire companies like Seventh Generation, which has a group of consumers who subscribe to a brand proposition that fits with Unilever’s, and Dollar Shave Club in the US, a non-traditional retail distribution with a different value proposition. Culture travels in these spaces. Seventh Generation has its own social mission, to maintain that brand’s heritage, which is built into Unilever’s. Culture also travels outside the business. For example, A&W, which advertises hormone and steroid-free meets in their advertising, used to be a Unilever company. Those long term inheritances are essential in thinking about sustainable business culture.
2. Gillin – Sun Life bought Bentall Kennedy, one of the most advanced companies in Canada for sustainable real estate investing and environmentally sensitive practices in building operations. The existence of synergies in culture was an essential starting point in developing the kind of long term relationship that an acquisition demands.
3. Coombe – For Bullfrog Power, there is a sense of a shared vision both inside and outside the organization among our customer base. Having staff who are passionately committed to that vision translates into communications and conversations with customers who share that vision. Culture travels – and the culture of Bullfrog’s mission travels within the organization and community of like-minded businesses.

[1] “Project: Superbrand. 10 Truths Reshaping the Corporate World.” Havas Worldwide, January 2016. http://mag.havasww.com/prosumer-report/superbrand/