Corporate social investment, value creation and the story brand

The shift to purpose-driven corporate philosophy asks the organization to add an additional layer to value creation and the brand. Cynically put, what this leads to is that a soft drink manufacturer, for instance, cannot just manufacture colas but must also improve the world around it. The question that needs to be asked is whether a beverage manufacturer should be required to exercise a crusading role? There is potential for debate on this topic.

In current corporate practice, the minimum standard will be a concern for ESG, to preserve environmental and social factors as well as the integrity of governance. In other words, the primary preoccupations for our softs manufacturer will probably be don’t pollute, save water, cut back on sugar and deal honestly with stakeholders and shareholders.

The issue with ESG is that it is primarily a negative filter in value creation: it comes at a cost, which might be reverse index-linked to the value of productivity and growth. It is difficult to quantify. However, the notional positive filter of productivity and growth is almost impossible to ascertain without observing losses in the absence of ESG over the medium to long-term.

The question now becomes what positive filter can be harnessed to meaningfully illustrate the purpose-driven nature of the enterprise and the brand?

One plausible answer lies in CSI, corporate social investment, a budget item which is consistently quantifiable, if only in terms of spend. However, in a sea of real human and environmental need, the application of CSI appears inconsistent with what is really needed in terms of value creation. This means a shift away from PR driven CSI to support for necessary and quantifiable socio-economic impact, particularly in Namibia.

To rejig CSI, the first step would be to reconsider where the greatest impact lies. The question arises of the relative impact of a community sport event with social benefits to a project that has an economic impact on the lives of community. The community event has strong impact on PR and marketing, but an economic event creates wellbeing in a manner that improves both the community and enterprise environment.

The second step on this path would be consideration of sustainability. In this determination, the route would be to provide funding for an asset, but to also consider income generation resulting from the initiative. That should spread income benefits, firstly to support the asset in the medium to long-term and secondly to provide income or other benefits to the widest possible spread of beneficiaries. Consider, for instance, support for a community pre-school, which could earn its way with fees but also provide benefits for children and families.

The third step is intriguing, to extend the CSI initiative into the business model of the donor enterprise. This can be illustrated with the example of providing mentoring services and / or assets for an informal enterprise that could provide services and contribute operationally to the goals and outcomes of the donor enterprise while providing jobs and incomes to the recipient informal enterprise. Call it double sustainability.

I noted a couple of paragraphs back that this approach eschews the intense focus on PR that currently characterizes CSI. However, that is not entirely true. What the initiatives have the potential to do is add to the story brand by reinforcing easily reportable value creation over and above ESG and the pigeonhole of social capital in the six capitals model.

There is also the additional spinoff of salience and resonance embedded in the employee brand.