Brandstanding: How today’s brands must view social responsibility

Aadil Mohamed -

Brandstanding: How today’s brands must view social responsibility

In 1970, Milton Friedman, an American economist who won a Nobel Peace Prize, famously said, “There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”

In other words, 50 years ago, the only responsibility of a business was to increase profits for its shareholders, which created a society where values were never discussed as part of any marketing campaign. Ever. If there were a corporate social responsibility campaign, it was often tacked on to the end of a campaign—and was typically there only to right a wrong.

Fast forward to today, where an environment of social injustices, a global pandemic, and civil rights movements has required brands to step up.

In contrast to Friedman, Jamie Dimon, the CEO of JPMorgan Chase, said in May, “This week’s terrible events in Minneapolis, together with too many others occurring around our country, are tragic and heartbreaking. Let us be clear—we are watching, listening and want every single one of you to know we are committed to fighting against racism and discrimination wherever and however it exists.”

Corporate social responsibility is no longer tacked on at the end of a campaign. It’s no longer about fixing a wrong. Today’s socially responsible brand is one that is a good member of society and does good to better us all—not just to line the pockets of its shareholders.

Doing good to do well

Philanthropy, the environment, ethical labor practices, and workplace equity are some of the areas where organizations are responsible for doing good to do well. Ethical factors are three times more important to consumer trust than brand competence and 83% of Millennials want their values to align with the brands from which they buy. 

The good news is that brands increasingly see that if they stand up for their values, they’ll be more successful—especially when they are communicated with transparency and authenticity, even if there is more work to do. According to the Inspiring Purpose-led Growth survey, brands with a purpose at their core grow at a rate more than twice as fast as those without (175% vs. 70%). 

This is a new world; one where values-based marketing has to be balanced with potentially alienating customers. There is a massive amount of cynicism when it comes to brands that release statements in regards to social injustices. Sixty-five percent of U.S. adults say brands do that just to retain customers. That’s an ugly place to sit when most have altruistic values and want to do better, while responding to consumers’ needs.

Do the values align with company culture?

If you’re new to discussing your values to meet consumers’ needs or if it’s old hat, there are four questions to answer before making a statement or launching anything new:

  1. Does my brand have a history of supporting social justice or will the action be seen as performative and opportunistic? 
  2. Is there a measurable way of quantifying our response?
  3. Is our workforce diverse?
  4. Is our executive team diverse?

With the first question, the brand may not yet have a history of publicly supporting social justice. In that case, doing so in a way that doesn’t seem to be opportunistic can be challenging. Not impossible, but there should be some care in how it’s handled.

Numerous brands have been called out on social media for practices that run contrary to their now stated goals. That’s where the answers to the third and fourth questions are important. If the brand makes a statement that says they don’t put up with racism or harassment, it must be above reproach. If it claims to be diverse, but no one on the leadership team is a woman or person of color, it must be prepared for backlash. 

For instance, #PullUpOrShutUp launched in June when Sharon Chuter, an executive in the cosmetic industry, asked brands to detail the number of Black employees they have on staff at a corporate or executive level. Within 72 hours, six of the top 10 beauty brands “pulled up”. What they found was that not a single brand is at population parity with the adult Black population (13%) and only one brand is above the Black college graduate population of 10%.

Many published their low diversity numbers with a promise of transparency and the intent to do better. While this exercise did not showcase diversity for any of the largest global beauty brands, it did place them in a more positive light because of their honesty.

Today’s socially responsible brand

There still is something to be said for transparency and authenticity, even if the results don’t meet the needs of consumers. Before doing so, though, conduct a risk assessment of your brand’s history and current diversity situation so that you enter into a public statement fully aware of any exposure.

Is there unaddressed racial bias inside the organization? Can employees (former or current) counter the brand’s claims? Will consumers demand more action?

These are all questions to be answered while doing that assessment. The best way to do that is through brand-focused social listening and early-warning risk intelligence, which will help you survey the entire landscape and help you understand what could be at play.

If, during the assessment phase, it’s determined that a statement will be made, be mindful that your messaging is authentic to the brand voice and that the company culture backs it up. If, however, your brand has no history of campaigning for social justice or being purpose-driven, consider carefully whether the statement will draw backlash and whether you are ready to be placed under scrutiny

Then, monitor the public reaction and be prepared with follow-up messaging to correct misinterpretations. 

It’s a brave new world out there where there are new rules of online engagement and significantly higher demands from consumers. Brands have to figure out their place in the middle of it all, while still promoting their products and services.

Be certain a statement, campaign, or marketing event is not a reaction to what’s happening in the world. Rather, take a longer view on what your organization stands for and how it fits today’s definition of a socially responsible brand.

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