CSRHub Blog Research on ESG metrics and comments on sustainability best practice

 By Carol Pierson Holding

In the past ten years, environmentally friendly cars have become a fixture in advertising. First came the Prius. Then BMW claimed its electric batteries boost performance, great for boosting the entire BMW brand. Chevy Volt, an electric hybrid, hypes range, innovation and American values, trying to minimize its differences from traditional cars. Nissan Leaf touts its green credentials, scooping up the ultra-green market.

Leaf’s green strategy is working against the Volt: Leafs are outselling Volts by over four to one. Yet even at that, Nissan only sold 1,362 Leafs in August. By contrast, Toyota sold over 30,000 Camry in the same period. The ultra-green sliver market may soon be sated. What’s next?

So far, electric car marketers have failed to position themselves against the 5 million+ internal combustion engine (ICE) market in any way but green, leaving that task to the press and consumers. And what is the buzz? So far, the biggest story about the electric car is “range anxiety.”

Too many reviews and user stories concentrate on the issue. Is 100 miles enough? When will the recharging stations be up and running? What happens in a bad traffic jam? How long would you have to wait for the special Level 2 Charger permit? Who would ever buy one until all of these issues have been worked out!

That’s why, when I walked into the garage of my uber-practical friend Jane (not her real name) and saw a brand new Nissan Leaf, I was completely shocked. Her former car was a 4-year-old Lexus. The Leaf seemed to be a step down, both in size and luxury. She supports conservation, but not when it interferes with her lifestyle. She spends many weekends at a place 60 miles away, so her 100-mile range wouldn’t cover the round trip. This just didn’t make sense.

When I gave her a doubting look, Jane said “Just drive it.”

Understand, we are not car people. We drive whatever gets us there. Jane’s Lexus was low maintenance and had a great GPS. I bought a used 1998 Volvo Coupe for the low price and great sound system.

But when I drove the Leaf, I felt transformed. Suddenly, I was 10 years old riding my bicycle down a hill without a helmet. Jane turned off the pedestrian-warning beeper and the only noise was the wind and the whine of tires on pavement. I later discovered its design features – light body materials, soft suspension and steering, double insulation, low adhesion tires and the instant acceleration of an electric motor - sort of ET-like, suddenly you’re going a whole lot faster – all contribute to the feeling of floating on a cloud.

Why aren’t the headlines about what a cool experience it is to drive an electric car? It is such a clear differentiation. Sports cars and Harley Davidsons are all about the experience. Sure, the electric car is not for those who would miss the growl of an ICE. But fans wax on about the experience, comparing it to a ride in a corporate jet or praising its quiet peacefulness. One ardent Leaf fan called it “Insanely wonderful” and told me, “It’s the first thing I’m buying when my company goes public.” Michael Carmichael writes in the Huffington Post that its acceleration is “...just like the Starship Enterprise.”

My favorite comment of all, from the Nissan Leaf Forum: “For now I'm just cherishing the boyish wonder that my Leaf is bringing me.  All the cars I owned were a mode of transportation, while the Leaf felt like a toy that I've always wanted.”

Now wouldn’t that make a great commercial?

By Carol Pierson Holding

Harvard Business Review’s cover story this month, “Creating Shared Value,” should be a celebration of how far CSR (Corporate Social Responsibility) has taken us. Just look at how much closer we are to accepting CSR as a core competitive strategy. As fans of authors Michael Porter and Mark Kramer know, these two have been proponents of CSR for years, pushing the field forward with new ideas like “Strategic Philanthropy” and now, “Shared Value.” Most impressive about their latest article is its place on the cover of this conservative business journal.

Two years after Harvard Business School ran an alumni conference on the future of capitalism (which eerily coincided with Lehman’s collapse and market’s 900+ point drop), that institution’s journal leads with this article, subtitled “How to reinvent capitalism — and unleash a wave of innovation and growth.” Finally, the argument about whether CSR is key to our future or just window dressing seems to be put to rest.

I applaud the authors. But why, aside from promoting their consulting business, would they insist that CSR is discredited and should be replaced by Shared Value? They misstate CSR’s mission as “doing good” when in fact it is “doing well by doing good,” which is the same as their concept of Shared Value. In fact, until recently, they were huge supporters of CSR. In their 2006 article, “Strategy and Society: The Link Between Competitive Strategy and Corporate Social Responsibility,” they pointed out flaws in CSR but weighed in heavily in its support.

Whether you call it Shared Value, CSR, ESG, or Corporate Citizenship, or Sustainability, or Corporate Responsibility, or Triple Bottom Line or any of the other terms people use, we are all pushing the same agenda—to do well by doing good. And the term “CSR” is well known and accepted in business.

It has been written about extensively in the business press. Most controversially, it has appeared twice on the cover of The Economist. First, to dismiss it per Milton Friedman’s “The business of business is business,” then a second time, in support of the concept. CSR has a set of metrics in place through the 20+ year old SRI ratings, a self-reporting structure in GRI, and a requirement in many companies’ RFP’s for a CSR report. Insurance, risk assessment, accounting bodies including FASB and many other industries and institutions all have “CSR” or “Sustainability” efforts underway. Porter/Kramer do a great service in lifting the issue to the front page of business, but why would we want to abandon all the progress made under the CSR rubric?

With CSR finally accepted as a core business strategy, Porter/Kramer now jump into the fray not with ideas of how to move more companies into the “Doing well to do good” camp, but with arguments about why their new name and model is better than CSR. Worse, even though they have several branding pros on the staff of their consulting firm, they dismiss the value of communications in support of CSR as mere promotion, ignoring the importance of communication in changing consumer behavior. Many of the companies Porter/Kramer cite as examples of Shared Value have used their brand to change consumer behavior for the better (think ads and promotion for GE Energy Smart CFL light bulbs). Yet Porter/Kramer fail to mention this.

Watching TV last week, I came across a great example of CSR communications’ power to increase sales while saving the planet.  The EPA confirms that in many cities, “The personal automobile is the single greatest polluter.” A key component to reducing these emissions will be the Electric Vehicle. Current ads for the Chevy Volt, the leading American-made Electric Vehicle (EV), are clearly good for Chevy’s brand reputation. But dismissing the ads as mere promotion misses the more important story: the advertising reduces fear of the EV by showing how easy it is to recharge, thereby persuading more consumers to buy EVs.  If this is CSR, I’ll take it over Shared Value any day.

Carol Pierson Holding is a writer and an environmentalist; her articles on CSR can be found on her website at  http://www.holding.com/Index%20links/articles.html.