Will CSR wither in a downturn?
Climate change, sustainability and CSR have had higher profiles in the last few years than ever before.
Major companies like M&S, Sky, HSBC, B&Q and others have developed major new CSR and sustainability programmes. David Cameron famously went to the Arctic to have his photo taken with the huskies. Labour has introduced the world’s first legislative binding commitments on climate change and Gordon Brown commissioned the Stern review. Level of public interest rose.
But now with the economy slowing down, the credit crunch biting, food prices, oil and energy prices rising rapidly, more bread and butter concerns have taken over as the main priorities. When your disposable income is down, you are struggling to pay your bills and you are concerned for your future financial security, do you care as much about the planet?
Will interest in climate change, sustainability and CSR wither in a downturn?
It is very noticeable that in the tracker opinion polls on what issues matter most to people, the level of interest in the environment had risen markedly over recent years. However, that has all gone into reverse. The number of people citing the environment in their top priorities has dropped. Not surprisingly, the numbers reporting the economy as their number one concern has risen dramatically.
The Tory party has already taken note. You can just imagine Andy Coulson, former editor of News of the World and now David Cameron’s spin doctor, taking Cameron aside and telling him to focus on issues like the economy, taxation, the family etc and to leave the environment alone. Cameron has done so and in a recent speech on his priorities, guess what? The environment was not one of them.
A year ago, Tory policy was to raise green taxes and use the proceeds to reduce other taxes. Talking about raising green taxes now (e.g. fuel tax escalator, vehicle excise duty) is not so sensible as the government is discovering to their cost and so the Tories understandably have gone quiet.
What they are talking more about is how consumers can save money from energy efficiency to keep their fuel bills down.
As for Gordon Brown, he never believed in the first place that environmentalism wins votes. He has always privately felt that the economy, jobs and financial security were more powerful for the vast majority of voters than abstract concepts on climate change. Historically, he has a point. But it is more difficult for the government to back down on policies that it has announced than it is for oppositions to go quiet on their previous commitments. So when the government backs down on bin taxes, delays the fuel escalator (again), goes quiet on national road pricing and maybe gives concessions on vehicle excise duty, as they either have done or are considering, it is widely noticed.
So there can be little doubt that politicians will tone down their environmental rhetoric and their policies in response to an economic downturn and rising prices. They are politicians after all.
But what about companies?
My feeling is that leading companies will continue to develop their climate change, CSR and sustainability policies. This is for a range of reasons. First, everyone said that CSR was a fad and would disappear in the downturn of 2001-03. They were wrong. It did not disappear and has gone on rising up the corporate agenda. Secondly, companies have invested in this area and will want to get a return on their investment. Thirdly, they know that they will be accused of greenwash if they retreat at the first sign of economic difficulties. Fourthly, the best companies genuinely do believe that they should act and that in the long term their key stakeholders expect it of them.
So, for the leading companies, while they may talk more about how customers can reduce their fuel bills or save money through environmental efficiency and reduced use of resources or travel, their commitment for the most part will remain. They will benefit from this. Sticking by your principles when the going gets tough creates respect, trust and loyalty from their stakeholders and will help them when the economy starts to pick up speed again.