Corporate Social Responsibility: Reputation and Consumers – Part 2
Corporate Social Responsibility (CSR) is an issue that companies can no longer afford to ignore. We've never been more aware of companies’ huge responsibility and influence on society. Research shows that when companies do engage properly with CSR policies, the rewards can be hugely positive in terms of reputation as well as helping society. But who does it affect, and how can companies make the most of this?
- Respondents place high importance on CSR, although few consider themselves – or act as – ‘ethical consumers’.
- The youngest and oldest are most likely to engage with CSR
- Income affects ethical consumer behaviour
Corporate Social Responsibility (CSR) is an issue that companies can no longer afford to ignore: it’s a field of rapid growth and increased scrutiny. With the help of activists, social media and some highly publicised examples of CSR, we are now much more aware of companies’ huge responsibility and influence on society. Indeed, research increasingly agrees that when companies do engage properly with CSR policies, the rewards can be huge for both society and the company’s reputation and bottom line.
Previous studies suggests that many people have high expectations of CSR and believe it is important for companies to engage with this (Nan & Heo, 2007). Customers who feel an affiliation with a company and its CSR policies are also less sensitive to a price increase (Lee & Schumann, 2009).
At the same time, positive CSR is seen as contributing to a consumer’s positive self-image (Sankar & Bhattacharya, 2001). Hobson (2004) agrees, saying that the rise of sustainable consumption is a middle class phenomenon used to assert social status.
Data for this research was collected via an online survey, and weighted in order to reflect the makeup of the UK according to age, gender, wealth and other demographic variables.
In total, 20 questions were posed to the anonymous respondents. There was a financial incentive for completing the survey in order to maximise response rate.
In total, there were 500 responses: 51% came from women, whilst socioeconomic groups were roughly equally accounted for. Older recipients of the emailed survey were more likely to complete it than younger recipients.
Are consumers aware of CSR?
72% ‘never’ discuss ethical buying with family and friends, emphasising the need for better communication with consumers, and highlighting the challenge currently facing companies looking to embed socially beneficial practices.
In addition to this, 61% of respondents have never heard about a company doing something bad in relation to the environment.
Despite these findings, a majority place high importance on CSR: 96% of survey participants agreed that it is important for companies to have good social and environmental policies. This is embodied most clearly in companies’ perceived adherence with local laws and rights, deemed by survey respondents to be the most important aspect of CSR.
Meanwhile, respondents ranked ‘fulfilling commercial and financial targets to create economic value’ as the least important CSR activity. This is also evidence that businesses are expected to do more than ‘just make profit’.
Have respondents’ attitudes influenced their behaviours?
Although respondents generally failed to actively campaign, nearly two thirds (64%) had bought a fair trade product in the past 12 months, showing the potential for further improvements in consumer behaviour if communication and awareness from companies is first improved.
Companies occasionally capitalise on this brand loyalty by charging a premium for ethical and fairtrade products (Lee & Schumann, 2009). 67% of respondents who had bought fairtrade believe they are an ethical consumer, showing that there is a market for actively ethical consumers – and also offering insight into how the term ‘ethical’ is perceived.
77% of 16-24 year olds had bought a fair trade product compared to 46% of 35-54 year olds. Similarly, the two youngest age groups (16-24 and 25-34) had the highest percentage of those who discussed ethical buying; 37% and 41%, respectively.
This undermines the idea that age and ethical consumerism are positively correlated, despite the fact that age and disposable income tend to be positively correlated. Instead, it appears that other factors influence ethical behaviours to a greater extent: perhaps knowledge of ethical products and issues, exposure to ethical marketing, or a greater enthusiasm about these issues.
Unsurprisingly, socioeconomic status – or wealth – appears to be a factor influencing consumer behaviour. One third of the wealthiest survey respondents consider themselves to be ethical consumers, compared to 21% of respondents in the least wealthy bracket. However this relationship was not linear, as individuals in the lowest socioeconomic band were more likely to identify as this than middle-class respondents.
However, as noted above, perceived behaviours can differ from stated attitudes. As a result, I also compared behavioural variables with socio-economic values.
Wealth was cross-tabulated with whether respondents had bought a product/service for ethical reasons. As expected – given the role that disposable income has to play in consumer choices, and the limited choice of ethical, low-cost products generally available – there was a largely positive correlation between wealth and ethical consumerism.
However, whilst the wealthiest survey respondents were most likely to discuss ethical buying with family and friends, this isn’t reflected in their consumer behaviour. Lower-to-middle class people were marginally more likely to buy products for primarily ethical reasons, compared to the wealthiest respondents. Furthermore, this group had the lowest percentage of respondents to have actively campaigned about an environmental or social issue more than once (19%), and the highest percentage who had never read an Annual Report or CSR Report (38%).
However, the highest socioeconomic group displayed the highest percentage of respondents buying a fairtrade product (32%), whilst less wealthy groups were less likely to have done so. This ties in with Hobson’s (2004) research which argues the rise of alternative sustainable consumption is a middle class phenomenon.
To conclude, wealthier respondents are less willing to actively campaign, but more willing to discuss ethical buying and pay more for brands with a good CSR record.
Previous literature on gender tends to suggest that, as a result of socialisation, women are more likely to develop trust, empathy, and to be seen as caring – and therefore perhaps more likely to choose a product with a good CSR record (Basil & Weber, 2006; Nelson et al., 2006). Indeed, Lee & Schumann (2009) argue that CSR is more effective in developing brand loyalty and trust among women rather than men.
It was therefore notable that attitudinal and behavioural differences between male and female survey participants were, for the most part, negligible. In almost every crosstabulation produced, gendered differences were only a few percentage points apart in either direction.
The only notable anomaly to this pattern was in the question which asked participants to rate the importance of different types of CSR. Men appear to be more keen to see a company which fulfils commercial and financial targets to create economic value, whilst women are more likely to prioritise the preservation and development of employees’ welfare and opportunities. This may be due to an economic system which currently favours male workers (so male participants may have been more likely to assign importance to the preservation of the existing model), whilst the importance (and existing inequality) of paid maternity/paternity leave in the UK – an issue which is recurringly in the news – may prompt women to prioritise workers’ rights.
In conclusion, respondents do value CSR and place great importance on it. However their behaviours are not always consistent with this. There are significant differences between demographics in terms of how CSR is perceived and the extent to which behaviours reflect this. In addition, there was a lack of awareness of both bad and good CSR, highlighting the need for better communication from companies so that people can make more ethical consumer decisions.
Thank you to the University of Manchester’s Q-Step placement scheme and AudienceNet for providing the opportunity and resources to undertake this research process.
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