When CSR enhances your Brand Equity

I had one more year left at the University of Ibadan as, right behind my Faculty, Afribank donated a beautiful building to the MBA School (or so) which had been busy imparting the traditional monistic, equity orientation of managing companies based solely on increasing shareholder value to its post-graduate students; no thanks to Milton Friedman (1970) who had argued that “the social responsibility of business is to increase its profit.” That gesture had a profound effect on me such that six years later, while advised by my employers to open a bank account, I headed straight for the nearest Afribank Nigeria Plc branch!

According to Henry Ford, “A business that makes nothing but money is a poor kind of business.” Sometime ago corporate responsibility was not difficult to understand: organizations were required not to “pollute.” Then came, “recycling,” and the need to be “environmentally friendly.” Today concepts such as “fair trade,” “sustainable development” and “accountability” have further expanded the scope.

I saw Afribank’s “donation” then as philanthropy but now I understand why more organizations are going further to integrate corporate social responsibility into their core business strategy and practice. The BMW website, for example, submits that “corporate responsibility now extends to encompass not only the needs of employees, but also the environment and society as a whole… the global economic system needs to show a more human face.”

Why does DHL donate insecticide treated nets (ITNs) to the public as well as its staff throughout Nigeria? I understand that one out of every five Nigerian children dies of malaria-related disease every year and this costs the country not less than $1.3 billion every year. According to USAID and DFID report, malaria kills 300,000 Nigerian children annually and 7,000 mothers every year. It is therefore encouraging that DHL has been supporting the government’s effort to reduce the burden of malaria in Africa by 2010 as contained in the historic Abuja Declaration on malaria.

Equally Skye Bank recently expressed its commitment to the Federal Government’s Roll-Back malaria campaign as part of its contribution to achieving the Millennium Development goals (MDGs) which are being threatened by malaria. I am also aware that over one billion people lack access to safe drinking water and 2.6 billion people do not have access to basic sanitation- e.g. only four million Lagosians have access to pipe-borne water.

It is, however, interesting that the United States Agency for International Development (USAID) has been working together with Coca-Cola since 2005, to support water partnership activities in Bolivia, Mali, Indonesia, Malawi, Egypt, Thailand, Uganda and South Africa. The Coca-Cola Africa Foundation (TCCAF) also recently awarded $500,000 to Junior Achievement Worldwide (JA) to pilot its entrepreneurship and work readiness programme in three African nations, including Nigeria.

Are you surprised that Nigerian Breweries Plc supports sports, education, entertainment, charity, etc.? Some of its CSR activities actually include installation of modern waste treatment plants, building roads and civic centres, construction of boreholes and fish ponds for host communities, etc.

The fact is in the mid- 1970s environmental and consumer movements applied pressure on organizations to assume responsibility for social and ecological consequences of their products and production processes. Almost daily corporations are being confronted with requests and challenges by various economic, political, and societal stakeholders that transcend market relations.

While taking the demands of various stakeholders for social responsibility into account, companies should also look for branding opportunities. It is remarkable that Nike provides healthcare and education in Thailand and Vietnam even as Ciba-Geigy prides itself as a public institution which deals with all groups and not just employees and shareholders. HP cooperates with The Copenhagen Centre for Corporate Responsibility on an initiative to equip small and medium-size enterprises (SMEs) with the management tools needed to operate their businesses in a socially and environmentally sustainable manner.

MTN Nigeria tries to improve the economy by empowering Nigerians through skills acquisition, training, micro-financing, capacity building, business support, etc. This complements its Foundation which also focuses on health and education. The rise of corporate social responsibility is also representing an incredible opportunity for public relations practitioners to deliver tangible business value through improvement of their organization’s capacity to respond to the ethical and social challenges of corporate life.

I very much support all CSR efforts especially because they sum up to the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large. However, what I still find a bit difficult to understand is the obvious inability of practitioners to cash-in on the goodwill of CSR which has the potential to create customer trial, purchase and loyalty and ultimately brand equity. This is because too often CSR activities are disjointed, unconnected and go in opposite directions.

This is an opportunity for many organizations known for laudable CSR activities to make their business strategy the foundation upon which both the CSR and brand strategy is built. The goal should be to integrate all the distinguishing qualities of the brand, drawn from all relevant stakeholders in such a way that there is personal commitment to and demand for the brand.

To accept social responsibilities is one of DHL’s seven Corporate Values and lies at the heart of DHL’s global Social responsibility programme. The company’s donation of ITNs in Nigeria is actually part of its Future Generations programme which aims to promote the welfare of future generations through a range of initiatives. But how many people know this? Imagine the MTN Foundation is an independent corporate, non- governmental organization! Talk of missed branding opportunities! “Cornerstone Insurance Plc bankrolls an annual golf tourney, etc,” “Afribank Nigeria Plc gives N3 million awards to winners of the annual Nigerian Army Soccer Tourney, etc.” These are fantastic gestures but how have these organizations tried to integrate these efforts with their brand marketing?

Visualize yourself as a shareholder in a company sponsoring golf tournaments- do you see this as misuse of your money? I do not think so if the activity is turned into a branding opportunity. What comes to your mind when the following brands are mentioned: MTN, Coca-Cola, DHL, Afribank, Cornerstone Insurance, Nike, etc.?

Lest I forget, my Afribank account needs reactivating!