First of Two Parts
Last month, energy company Con Edison became the latest to join the conga line of corporate powerhouses - American Airlines, Coca-Cola, GM, Sunoco and Nike among them - to
publicly endorse the "CERES Principles," a ten-point code of corporate environmental conduct forged by the Coalition for Environmentally Responsible Economies. This is one of
several new doctrines philosophically germinated from the well-known "Sullivan Principles," which, in the 1970s, offered human rights guidance to multinational corporations
entering the business environment in apartheid-era South Africa.
In joining the CERES pact, Con Edison pledged a commitment not only to regulatory compliance, but also to higher standards of waste reduction, energy conservation and public
disclosure regarding company operations that might pose a threat to public health and safety.
Perhaps the most interesting thing behind this new ethical dictum that the big guns are incorporating into their operating plans and positioning strategies are the authors.
They are the very same activist groups with whom corporate America - in a previous life - publicly butted heads. CERES coalition members include NGOs [non-governmental
organizations] such as the National Wildlife Federation, the Natural Resources Defense Council and Sierra Club, labor unions and a formidable contingency of institutional
investors who've begun to realize the earnings potential associated with green business practices.
The hard and fast battle lines that historically separated advocacy groups and big business are beginning to blur as the two sides learn to work more effectively alongside one
another. "We're seeing a greater effort among private sector organizations to engage NGOs in direct dialogue," says Michael Daigneault, president of the Ethics Resource Center
in Washington, DC. "Corporations have finally realized that in any exchange of press releases with an NGO, the corporation is going to be painted in a bad light." He explains
that companies avoided direct contact with advocacy groups, relying on the media as a sounding board. This led to sensationalism in which the corporation nearly always suffered a
hit.
Strange Bedfellows
Open lines of communication with advocacy groups seem to prevent bad press. But the real goal behind coalition building, evidenced by the CERES Principles, is to adjust
policies that result in good corporate citizenship. Global corporations now seek as advisers the same tree-hugging activists they once so disdainfully avoided. Because in the
reputation arena, public trust remains a premium that the nonprofits own.
Edelman's Strategy One conducted a survey last December that found nearly two thirds of respondents espoused the belief that corporations care only about profits, while more
than half said NGOs "represent values I believe in" (PRN, Dec. 18). Moreover, the study found that organizations such as Greenpeace, Amnesty International and World
Wildlife Fund are trusted nearly two to one by the public to "do what is right" compared to government, corporations and the media. A third party endorsement from an advocacy
group has, in many cases, superseded the ever-coveted media plug on the list of PR holy grails.
But not-for-profit accolades don't come easily. In the best scenarios, businesses proactively adopt more ethical operating principles - with input from advocacy groups - and
these principles, in turn, drive their PR strategy.
Case in point: when Chiquita Brand International opted into the Rainforest Alliance's "Better Banana Project" in 1992, it set operating standards for itself, similar to the
CERES Principles. At that time, the general manager of operations in Costa Rica drove the company's $20 million overhaul of its land use practices. But the company has revamped
all its farms in Latin America and Chiquita PR director Magnus Welsh has become chief liaison between corporate HQ and the Rainforest Alliance headquarters in New York.
"Clearly this program has given us new message strategies to develop surrounding our environmental program," Welsh says, noting that Chiquita's Better Banana commitment has
opened doors to new markets, including some grocery chains in Europe, where consumers are more likely to base purchasing decisions on eco-friendly farming practices. "Last year
we announced an expanded code of conduct and a new set of core values for the company," she says. "Now we're working on our first corporate responsibility report." (For more on
social/environmentally responsibility reports see PRN, Jan. 29.)
Companies that adopt the CERES Principles pledge to uphold higher environmental operating standards, and "to support and practice the ethic of stakeholder engagement by clearly
communicating corporate policies, problems and successes with employees, shareholders, customers and concerned citizens at all stages of the firm's decision-making processes,"
according to a CERES press release. Good communication is part of the good citizenship pact.
Lip Service Gets You Nowhere
Coalition covenants, at least, try to keep companies honest. The challenge for corporate communicators, says Adam Segall, U.S. director for strategic philanthropy at Hill
& Knowlton, is to make sure outgoing messages touting lofty corporate ethics remain consistent with actual corporate behavior. The worst thing a company can do is spew
out the rhetoric of social responsibility as a PR ploy. "You have to make sure the message you send out about who you are is, in fact, who you are," Segall says, citing
backlash against Philip Morris' latest image campaign, which characterizes the tobacco giant as "caring."
"Here, the gap between public perception of the company and the values it's claiming to engender is so wide as to create more cynicism in the marketplace," says Segall. PR
professionals worry that in the long run, the public's perception of corporate ethical abuse can undermine the reputation of the entire PR community - not to mention dashing the
hopes and efforts of other corporations that wish to position themselves as good corporate citizens.
"There is a danger when corporations tend to see [human rights and environmental positioning] as just an advertising or PR exercise, and not as more substantive issues that
need to be addressed," says Frank Vogl, president of Washington, D.C.-based Vogl Communications and vice chairman of the watchdog group Transparency International. Too often, he
says, PR practitioners hinge their worth on the ability to manage corporate image crises, when in fact, they should focus more on the ability to prevent them.
"The integrity of the corporation that stands behind the brand is even more important than the marketing or promoting of the brand itself," Vogl states. "So many people
involved in the integrated marketing and communications of corporate brands have not paid adequate attention to the values that should be seen at the core of the brand
itself."
(Daigneault, 202/737-2258; Segall, 212/885-0300; Vogl, 202/331-8183; Welsh, 513/784-6325.)
Lacking Standards for Standard-Bearers
Perhaps the greatest challenge for global companies seeking assistance in the development of ethical standards is that there are no universal guidelines governing appropriate
business conduct with respect to human rights, environmental issues and the like.
According to Adam Segall, U.S. director for strategic philanthropy at Hill and Knowlton, the most common metrics in use today benchmark corporate performance in areas such as
consumer perception, values and transparency of decision-making, environmental policy, supplier compliance with corporate practices, meaningful community involvement/interaction,
workplace ethics and government relations.
Among the more popular benchmarking studies and guidelines in use are those issued by the Institute for Social and Ethical Responsibility, the Global Reporting Institute, the
Organization for Economic Cooperative Development (OECD), the Coalition for Environmentally-Responsible Economies (CERES) and Amnesty International.
For more information about emerging ethics programs, visit the "Business for Social Responsibility" Web site at http://www.bsr.org.
Part II will explore how communications advisors play key roles in integrity management, bridging the gap between corporate rhetoric and actual performance.