CorpComms Magazine

Corporate and social responsibility (CSR) programmes have been around under that umbrella term for more than a decade but, increasingly, companies are talking in a new jargon. The new buzzword is 'sustainability', and it means more than just making sure the world doesn't run out of resources.

Sustainability means environmental responsibility but it also means doing and being seen to do the right things socially, and it has given new momentum to the Fairtrade movement. Fairtrade was born in the Netherlands in 1988 when the Max Havelaar Foundation launched the first Fairtrade consumer guarantee label on coffee sourced from Mexico. During its early years, at least, it was widely regarded as the realm of hippies and dreamers. But not any longer. Fairtrade is now very much mainstream and the corporate world is recognising its relevance.

Cups of kindness

At first, it was left to socially aware organisations like the Co-operative Bank to blaze a trail. The bank switched its vending machines to Cafédirect Fairtrade coffee in 1997, adding Fairtrade tea four years later. More than 4 mn cups of Fairtrade drinks are now consumed every year at the premises of Co-operative Financial Services, where no other tea, coffee or hot chocolate is available. That makes the organisation the UK's largest workplace consumer of Fairtrade products. 'There really can't be a more meaningful but simple demonstration of how business can be a force for good through its everyday purchasing,' comments Barry Clavin, the organisation's ethical policies manager.

More traditionally capitalist organisations are also converting to the Fairtrade ethos. In December, supermarket chain Sainsbury's unveiled the biggest ever commitment to Fairtrade by a single company when it announced that all its banana supplies from then on would be Fairtrade-certified. Given that Sainsbury's sells 10 mn bananas a week, the move doubled the volume of Fairtrade bananas bought in the UK. Waitrose, which was already offering loose Fairtrade bananas, immediately followed Sainsbury's lead.

Elsewhere, BT Group adopted Fairtrade coffee at all its UK offices, adding 3.5 mn cups of Fairtrade coffee to the UK's annual consumption. Other organisations that have made Fairtrade commitments include accountants KPMG (tea, coffee, sugar, wine and apple juice); engineers Arup (tea, coffee, sugar, biscuits and nuts); the Metropolitan Police (tea, coffee, flapjacks and Traidcraft Geobars); and even Edinburgh Zoo (tea, coffee, hot chocolate and sugar - but not animal food). In January, meanwhile, Marks & Spencer announced plans to switch key clothing ranges to Fairtrade as part of its new sustainability programme. About 20 mn cotton garments at M&S stores will be Fairtrade-certified. The retailer, which already sells only Fairtrade coffee and tea, will also offer Fairtrade jams, preserves and bagged sugar.

Fair question

The question for corporate communicators is whether going the Fairtrade route is simply a politically correct whim of the times or something more profound that can add real value to companies. Corporate converts to Fairtrade insist it enhances their reputations, reflects their values and therefore leads to increased shareholder value. Many say they do it not only because it is right but also because it is good business.

'Fairtrade is a big deal for us,' says Adrian Hosford, CSR director at BT Group. 'We feel Fairtrade coffee is a better and fairer way of life. You cannot just offer it as an option; you really have to decide that you are going to do it full time. We consulted with the employees and did trials to make sure they liked the coffee we chose. Switching to Fairtrade coffee says that BT takes its social responsibility seriously. We've been doing environmental measurement and reporting since the start of the 1990s and social reporting since the end of the 1990s. We've got it into the bloodstream of the way we do business.'

Hosford adds that BT surveys prove such measures have commercial as well as social benefits. 'We've established that for every 1 percent improvement in the perception of BT's CSR, we get a 0.25 percent increase in our corporate reputation, which in turn increases our sustainability by 0.4 percent,' he explains. 'Customers who strongly agree with the statement that we are responsible are twice as loyal as people who have a low perception of how responsible we are being. And 65 percent of our employees say they feel proud to work at BT as a result of the things we do in this area. We think this is a really good business case for doing it.'

Soaring sales

Sainsbury's feels similarly about its Fairtrade bananas. Its switch increased five-fold the amount of Fairtrade bananas it buys from growers and means the percentage of the UK banana market that is Fairtrade-certified is now expected to grow by 75 percent by July this year.

Sainsbury's sells 1,000 bananas a minute and perceives its switch as reinforcing both its commitment to sustainable sourcing and to its position as the UK's leading Fairtrade retailer. The group converted 75 percent of its roses to Fairtrade last year and, even before the banana switch, accounted for a third of the value of Fairtrade products sold through major UK retailers. Last year, customers of Sainsbury's spent £55 mn on Fairtrade products at the supermarket's tills. For its part, the Fairtrade Foundation reports that sales of its products have doubled every two years since 2000. So much progress has been made, says the group, that it's hard to remember the first Fairtrade bananas were sold in the UK only seven years ago.

'The point about Fairtrade was always that businesses could do business better,' says head of communications Barbara Crowther. 'It was never meant to be a companies have to do business and do it profitably, and this is how they can actually do it in a way that's win-win for them and for producers.

'I know M&S experienced an uplift in coffee and tea sales after it switched to 100 percent Fairtrade coffee and tea. The company's sales of tea and coffee grew above the general market growth level, so it managed to grow market share as a result. This is what can happen when companies listen to - and act on - what their customers want.'

Customer approval

Surveys back up such claims. A study by researchers Millward Brown in 2004 found 31 percent of consumers claiming they will not buy products made by companies that do not behave in a responsible manner. Only 15 percent say they don't mind whether companies behave responsibly as long as the price and quality of their products is acceptable.

A separate survey in 2006 by the Fairtrade Foundation found that 38 percent of workers think their company should make products car rying the Fairtrade mark available to staff at work. Only 17 percent of respondents said such products are currently available.

Andrew Pharoah, head of corporate communications at public relations agency Hill & Knowlton, agrees that CSR programmes and Fairtrade initiatives can bring real benefits to companies. He cites the example of DIY chain B&Q's initiative with the RugMark Foundation, which is working to end illegal child labour in the carpet industry and offer educational opportunities to children in South East Asia.

B&Q is also working with the Forestry Stewardship Council on sustainable forestry products. 'It is visible in the stores,' Pharoah comments. 'B&Q did a lot of early work on the labelling of paint, too. In reputational terms, it clearly aided the firm's profile so now the company is viewed differently.'

But Pharoah warns that companies can quickly become unstuck if they make only token gestures or give lip service to Fairtrade.Customers are increasingly sophisticated, while non-governmental organisations and lobby groups are highly committed and organised, he says, and will find out quickly if parts of your operations or supply chain do not match your commitments to Fairtrade or CSR.

'The real success of these things in the longer term is whether companies can derive fundamental benefits from Fairtrade and CSR programmes,' he explains. 'If they do not get a direct benefit in terms of increasing customers or recruiting staff, or if people in the organisation do not understand the benefit, then such activities are in danger of being seen as the personal whim of the chief executive. I think having a commercial return is important.'

A question of trust

Rachel Jones, head of CSR at public relations agency Fishburn Hedges, says Fairtrade has to resonate through an organisation. 'Companies shouldn't see Fairtrade as a ribbon they can simply wrap around their products to make everything okay,' she says. 'They need to examine all their supplier relationships and embrace real change throughout the supply chain, even if it means making some hard decisions.

'That said, there are real benefits for organisations associating themselves with Fairtrade. It is undoubtedly one of the certification schemes that is most recognised by customers, and has real clout with the general public. Labels such as Fairtrade can provide a level of trust that purely commercial brands find hard to achieve. It helps companies to gain a degree of trust in their social commitment that would be hard to generate from just doing their own thing.'

The question is how obligatory signing up to the Fairtrade movement will be in the future as the UK's customers and employees become more demanding. 'There are a lot of companies that spend a great deal of money on CSR but are not involved in Fairtrade,' says Pharoah. 'I think you have to know where you stand on Fairtrade as a company nowadays but I don't think we are at the stage where you can have a position on CSR and at the same time not be part of the Fairtrade movement.'

Crowther believes Fairtrade has to permeate an organisation. 'It is ultimately about your values, personality and the way you do business,' he says. 'It is not just about sticking a Fairtrade label on your products - it has to reflect what happens with your products and your business. It has to be a signal that you are trading in a different way.'

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