There is serious commercial and reputational risk to not addressing social responsibility head on. But for most retailers it is frequently treated as a tick-box exercise.
Every day we are confronted with stories of plastic waste polluting our oceans and of suppliers to leading Western brands subjecting their workforces in developing countries to inexcusable working conditions.
Today’s consumers have a heightened awareness of this and are increasingly tuned in to the origins of the products they procure: Where it was made? Who it was made by? What materials were used?
“How do consumer-facing brands move beyond corporate social responsibility being just a box-ticking exercise?”
Unfortunately, too many brands do not have a positive story to tell and instead work to conceal this information from customers. The lack of transparency will inevitably come back to bite them.
The brand builder in me says telling stories about how products are manufactured, including what materials were used, is potentially an incredibly powerful message to impart upon customers.
Retailers and brands that focus only on margin, holding little regard for the environmental and human harm caused by their manufacturing processes, are taking a very narrow and short-term perspective.
Over time, these businesses will lose sales and market share as their customers migrate to brands that demonstrate they genuinely care about the environment and have taken steps to ensure they are adopting the best approach to sustainability.
From CSR to EP&L
So, how do consumer-facing brands move beyond corporate social responsibility (CSR) being just a box-ticking exercise to something much more meaningful and impactful?
First of all, I don’t like the term CSR. It places too much emphasis on ‘corporate’ and not enough on ‘social’. It should simply be ‘social responsibility’ as that helps to promote the move towards purpose-led initiatives.
Kering, the group that owns many international luxury brands including Gucci, Alexander McQueen and Balenciaga, has a department dedicated to sustainability and created an ‘environmental profit and loss’ account, known as an EP&L.
The EP&L allows Kering to measure the environmental footprint of its own operations and across the supply chain. It then calculates a monetary value associated with this footprint as well as the benefits it generates for the environment.
This enables the business to closely monitor its environmental performance over time and make more sustainable business decisions. It moves the emphasis away from a tick-box scenario to one where sustainability becomes a core part of the business strategy and everyday life.
“With a code of conduct in place, you have something to leverage when it comes to holding people to account”
Unilever also puts sustainability at its core. It published a human rights report for its supply chain, which focused on providing a fair wage to its employees and suppliers and addressed the issue of poverty throughout the supply chain.
Matches Fashion has adopted a code of conduct for its suppliers and internal team, covering shipping and packaging guidelines along with other elements of its value chain.
This is a great way to ensure that both your colleagues and your partners buy into what you’re trying to achieve. With a code of conduct in place, you have something to leverage when it comes to holding people to account.
Ultimately, the retailers that fail to be socially responsible will soon find themselves held to account by their customers.