The COVID Effect on CSR and Marketing

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Just as the coronavirus outbreak has prompted individuals to step back and review their lifestyle choices, it’s also triggered organisations to question their purpose and value within the overall business ecosystem. This has, in turn, increased the development of corporate social responsibility (CSR) initiatives, with more businesses feeling the pressure to respond to consumer expectation for them to operate with a stronger social conscience.

Our experience of the current crisis has demonstrated to the public that government intervention can only go so far – companies can and should take on the responsibility too. Many have promoted the government’s social distancing measures and have even pivoted business models to support with the shortage of PPE and hygiene products.

Safety first

In the short-term – and as we saw during the initial lockdown period – the major CSR opportunities companies latched onto were directly related to public health initiatives and support for consumers and safeguarding employee welfare. Nowadays, a company’s CSR strategy is benchmarked against its ability to maintain health and safety processes and procedures in their operations, production and service delivery to an excellent standard.

For consumers specifically, ensuring product safety and providing a safe shopping and consumption experience is the ultimate priority. But beyond health and safety, honest pricing is and will continue to be appreciated by customers in the weeks and months to come.

Mental well-being and the wider community

And as people gradually return to the workplace, companies will be under scrutiny when it comes to their well-being initiatives, specifically around mental health, as the winding down of furloughing in October and an upcoming recession begin to come into effect.

But as well as employee and customer support, there are other ways to enhance CSR by working with other stakeholders too, namely suppliers and the local communities in which businesses operate. In this respect, the golden CSR principle of adopting a partnership approach with all stakeholder groups is even more important during this particular crisis than it’s ever been before.

But while there is an expectation on all companies to deliver in a socially responsible way, we need to recognise that not all companies are the same – our expectations of them, and also how they can contribute in terms of CSR, should also differ accordingly.

The covid-thriver, the covid-proofer and the covid-sufferer

From a covid-19 perspective, companies are placed into three categories depending on their response and the way the pandemic has directly impacted them: The covid-thriver describes those organisations that have naturally thrived during the pandemic due to the nature of the services they offer – such as gaming companies or online delivery services like Amazon. The covid-proofer includes those companies that are resistant to the pandemic’s impact, such as supermarkets, some FMCG companies, and essential product manufacturers. The covid-sufferers are those companies that have borne the brunt of the pandemic’s impact, namely service, hospitality, travel, and tourism companies. For all three variations, the challenges and opportunities can differ significantly, particularly in the short term, but it’s the longer-term impact that will likely see these categories shift.

Short-term vs long-term mindsets

People’s expectations of companies are already beginning to shift as consumer decision making is even more driven by social and environmental concerns. However, this positive trend could be decelerated by concerns for health and safety. For example, people might be using less public transport and more plastic bags for genuine immediate health concerns, meaning long-term social and environmental issues could be kicked into the long grass. However, this potential conflict is avoidable by finding a way for people to avoid making trade-offs by aligning CSR activity to emerging, timely and salient social issues, which presents a huge CSR opportunity for companies in the long-run.

But with a recession looming, financial strains caused by the outbreak could lead to firms pursuing short-term gains as they enter survival mode, causing them to reduce or abandon CSR investments altogether, committing misconduct or even fraud. Cash flow issues could force companies to re-channel their financial resources to tackle immediate challenges, which could impact company structures in several ways. For example, stakeholder pressure might be shifted, particularly as shareholders put on the pressure for financial return. Managerial interpretation of how stakeholders’ expectations could be shifted could also cause a detrimental impact – some companies may think that consumers will only be guided by price alone, for example, meaning ethical and moral implications of their actions will slip to the bottom of their priority list.

Telling the frauds apart from the genuine do-gooders

To avoid short-termism, strong leadership is key. The pandemic is the perfect acid test of many firms’ genuineness of their CSR record and strategy. For those companies that have established a genuine CSR, ethical, and sustainability culture, particularly among their senior management team, corporate governance, and strategic decision-making process, they will be much less likely to opt for immediate profit gain at the expense of longer-term security.

How to protect the long-term investment from short-term pressure is crucial. What kind of support businesses can access, such as governmental, bank, and other external support, can make alleviate their short-term pressure to some extent – furlough schemes have been so far largely successful in this regard. But a green recovery is crucial, as is using the UN’s sustainable development goals, particularly the Goal 17 Partnership, as the guide for CSR strategy and investment in the long-run.

Written by Hongwei He, Professor of Marketing and School Director for Social Responsibility ad Alliance Manchester Business School 

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