A Wake-up Call for Corporate Australia 3

Thursday, September 1st, 2016
liked this article
Engineering Education Australia – 300 x 250 (expire Nov 30 2016)
FavoriteLoadingsave article

New research finds that two-thirds of Aussies believe companies pursue profit at all cost.

A new report by social do-gooder and Grand Design 7 Star eco builder and home owner Hailey Cavill shows a looming crisis for Australian companies as consumers become more disenchanted with corporate greed.

Talking the Walk® – the definitive guide to communicating CSR & Social Good, launched last month by Cavill’s company Cavill + Co, presents a compelling case of a looming crisis for Australian companies as consumers become more disenchanted with corporate greed.

The report revealed that a startling 66 per cent of Australians (including those who work for corporate Australia) agree that “in general all (corporations) do is care about profit and they’ll do anything to get it, even damaging society and the environment in the process.”

corporate australia

The good news, however, is that while overall Aussies are pessimistic about the issue, more than one in four are still open to being persuaded that companies can do good, and the younger generation – future consumers – appear more open to this.

The report also unveiled what Aussie respondents suggest business leaders could do for them to trust them more, and the top answer was ‘share personal values’ (77 per cent) followed by ‘share obstacles they have overcome’ (63 per cent) and ‘share personal success story’ at 60 per cent.

“Products that do no harm are desired, and guilt-free brands that do good are especially popular. See the rise of social enterprises like thankyou, Hero condoms who donate a pack for every one purchased and Who Gives a Crap toilet paper that invests in WaterAid to improve sanitation in developing countries,” the report stated.

“It’s all too easy for short-termistic CEOs to halt investment in CSR because ‘it isn’t impacting the bottom line.’ And let’s not fool ourselves: the bottom line is always no.1 when it comes to corporates.”

In the new world paradigm, consumers want to engage with brands they trust and which they see as doing good rather than harm. This is where reputable certification programs such as Global Green Tag and Greenstar play a vital role by independently verifying a product or building’s credentials.

As we move toward a carbon neutral global economy by 2050, there has never been a more important time for the engineering and construction industry (which accounts for around 30 per cent of global greenhouses gas emissions) to get its communication right.

We are seeing the level of consumer skepticism rise – almost 50 per cent of Australian consumers think brands just spend millions of dollars on advertising telling us about CSR whilst providing no proof of this or the benefits.

Most corporations are simply failing in their efforts to communicate with everyday consumers and wasting millions of dollars, but if they are prepared to take a new approach there is a huge opportunity to stand out from their competitors, and become an employer of choice.

Here are a few key takeouts from Talking the Walk:

  • most companies fail to communicate CSR and social good so that it resonates with consumers
  • they neglect to use CSR to differentiate, engage, inspire or motivate
  • effective communication makes the difference between CSR being dismissed as a reluctant expense or warm and fuzzy gesture and being embraced as an investment that provides a competitive advantage
  • awave of scandals and unethical behaviour has led to widespread mistrust of corporations
  • even those working within the corporate sector (employees) don’t trust corporations to do the right thing
  • consumers are much savvier about marketing tricks and there are numerous platforms both on TV and online to express disappointment and outrage
  • Australians – whether they are Baby Boomer or Gen Z – all share a few things in common. We’re all human, emotional beings. We process pictures much faster than words, we retain information in story form, and our brains are wired for altruism
  • when it comes to sharing the struggle to balance the commercial imperatives with social and environmental concerns (CSR), companies often fear criticism, so they hide behind over-sanitised CSR reports that are simply ignored at best, or cause skepticism at worst.

There is a clear solution – businesses of all sizes need to talk to consumers, and they need to do it differently. With only 13 per cent of people trusting what they read in a company’s sustainability/CSR report, it’s time to re-think firmly embedded communication approaches.

FavoriteLoadingsave article


 characters available
*Please refer to our comment policy before submitting
  1. Anne Paten

    Yes, Anne-Marie there are good reasons for consumers' distrust of business, especially in the building domain. And even those who work for corporates, and they know best, share this distrust. CSR is a nonsense and it is decades since consumers or 'service' were factored into the business/profit equation. It is unsurprising that the younger people have some optimism – they have not yet had the list of disasters to color their experience and hence formulate more realistic opinions based on fact.
    You are right about talking to consumers – but it must be honestly. For this to happen, there needs to be consequences for dishonesty and harming consumers and the community. Please help us to start the conversation and path towards same. Thank you for this article.

  2. Tom Roberts

    It must be remembered that directors have an obligation under the Corporations Act to act within the best interests of their shareholders at all times.

    For this reason, whilst company directors do need to act within the law, their first and foremost accountability is to the shareholders whom they serve. That makes a great deal of sense. If you are a small business and you employ someone, who are they primarily accountable in as far as their conduct and performance of duties at work? You, of course. It's the same concept with company directors at the opposite end of the scale. Directors are employed by shareholders and have both a legal and an ethical duty to serve the best interests of those who employ them and to whom they are accountable.

    That said, there are of course limits to this. Companies do have responsibilities and accountibility to customers, employees, subcontractors, suppliers, regulators and society at large in terms of matters such as delivering upon agreed levels of product quality or service, honouring agreements and legal requirements and paying appropriate levels of taxation. (Of course, there are many who do not do this. Take Donald Trump, who consistently refuses to pay workers their rightful and agreed wages and leaves contractors going unpaid or underpaid.)

    Nevertheless, the general principal is that company directors are primarily accountable to those by whom they are employed – that is, the shareholders.

  3. Anne Paten

    Tom, you are correct about shareholders. However, through their superannuation funds many shareholders are ordinary Australians AND building consumers and deeply concerned about fair trading practices and their extreme disadvantage. Furthermore, shareholder profits (and executive salaries) should not be the only, or the most important consideration in the relationship between business and consumers. Rather the way we conduct our businesses, and how we write our ‘rules’/ 'laws' for all in society should be paramount. They should be equitable to both parties. Just reflect on the impact for the majority, namely consumers who fund the building industry. This is why we need a 'WAKE UP CALL'. Fundamentally this is about the ethics of business – the key moral imperative here is simple: "What is RIGHT and what is WRONG?"
    Governments have a responsibility, indeed a duty to curb market excesses. Most people if they are honest recognize the biased, unfair and ‘not right’ overarching legal and governance 'arrangements' for the building industry, and know that these are wrong. If not, how could we have such large numbers of consumers so horrendously impacted? What is clear is that the market cannot be left to regulate itself, especially with the enormous disparity in power between the two parties. Business has directed Government policy, with the legal framework skewed to advantage business and to place consumers at extremely high risk of harm – voiceless and vulnerable, they are massively disadvantaged. Much of building 'law' has been made legitimate, but it does not pass the ‘fairness test’ – only 'legal' because of the lobbying by the powerful players with sway over government. This conduct is not morally or ethically defensible!