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Triggers and Considerations for refreshing CSR marketing servicesto create greater economic value for clients

March 26, 2015

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The backdrop

Full (albeit slow to implement) sustainability commitments by global governance organizations and leaders (e.g. UN Global Compact, World Economic Forum, etc.)

Growth of Corporate Responsibility reporting within the global business community – much of it driven by new regulations – as 71% of the top 100 companies in 41 countries covered in KPMG’s Corporate Citizenship survey are reporting on CR

The broad adoption of Environment, Social and Governance (ESG) principles (e.g. PRI, global stock exchanges, pension fund mandates)

The specific integration of ESG principles into traditional financial analysis, up +116% globally from 2012 to the start of 2014 and reaching $12.9 trillion in AUM

Recognized synergies/overlaps between sustainability, corporate responsibility, and ESG

Sources: “Value of sustainability reporting”, Ernst & Young LLP & Boston College Center for Corporate Citizenship (link), “The KPMG Survey of Corporate Responsibility Reporting 2013” (link); Pension & Investments.

www.tillypick.com 3Sources: “Value of sustainability reporting” study by Ernst & Young LLP and the Boston College Center for Corporate Citizenship; data from GRI Sustainability Database; The KPMG Survey of Corporate Responsibility Reporting 2013” (link); .

CR reporting growth is institutionalizing corporate responsibility.“CR reporting is the means by which a business can understand both its exposure to the risks of environmental and social changes and its potential to profit from the new commercial opportunities…it appears to be standard business practice the world over.” (KPMG)

Global momentum of CR reporting confirms full commitments.71% of top 100 companies in 41 countries covered in KPMG survey are reporting on Corporate Responsibility.

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ESG investing growth correlates CSR to the financial markets.Assets and funds incorporating ESG criteria in the U.S. have grown from $12 billion in 1995 to $4.3 trillion in 2014. The financial markets are demanding substantive CSR.

Abundant proof that CSR is embedded in ESG/SRI activities.“Institutional investors are also using checklists to evaluate a company’s CSR efforts and consider a range of issues, includinggovernance practices, board diversity…” (IR Magazine)

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www.tillypick.com 7Source: “Value of sustainability reporting” study by Ernst & Young LLP and the Boston College Center for Corporate Citizenship

While “reputation” is a major outcome of CR reporting….

Major Outcome

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…“reputation” is not a primary reason for CR reporting.

Low Priority

Source: “Value of sustainability reporting” study by Ernst & Young LLP and the Boston College Center for Corporate Citizenship

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The KPMG and BC-CCC studies also point to gaps to be solved within CR reporting or with supplemental CR activities.

Industries, countries, content areas with poor CR reporting grades overall

Industries which derive low value from CR reporting to support customer & employee loyalty

Significant supply chain coverage gaps within CR reports

Coverage gaps in product/service impacts within CR reports

Imbalanced reporting of sustainability megaforces

Insufficiently identified innovation and opportunities

Sources: “Value of sustainability reporting”, Ernst & Young LLP & Boston College Center for Corporate Citizenship (link), “The KPMG Survey of Corporate Responsibility Reporting 2013” (link).

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Industries, countries, content areaswith poor CR reporting grades overall:

www.tillypick.com 11Source: “Value of sustainability reporting” study by Ernst & Young LLP and the Boston College Center for Corporate Citizenship

Industries which derive low value from CR reportingto support customer and employee loyalty:

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Significant supply chain coverage gaps within CR reports:

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Coverage gaps in product/service impacts within CR reports:

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Imbalanced reporting of sustainability megaforces:“They do not function in isolation from each other – they are interlinked in a complex system.”

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Insufficiently identified innovation and opportunities:

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Triggers and Considerations for refreshing CSR marketing servicesto create greater economic value for clients

1. Strategic activation of CR reports2. More impactful production (for increased consumption) of CR reporting content3. Increased communications effectiveness of CR reports4. More integrated and efficient implementation

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1. Strategic activation of CR reports

Because the brand and an organization’s reputation are not and likely never will be a primary consideration for CR reporting, the actual reporting of CR achievements is likely underleveraged for business activities where brand and reputation are key assets, including customer loyalty, marketing to prospects, employee engagement/retention, and talent acquisition.

The trigger here is the difference (and gap) between publishing CR achievements and getting key audiences to read, engage, and act on them.

The solve is implementing (or leveraging and supplementing existing) subject matter experts within an agency to strategically advise clients on maximizing the investment in CR reporting to support business priorities with key audiences. This includes the supply chain (where most of the sustainability issues tend to reside), employees (engagement, retention, acquisition), investors (ESG), communities, and customers.

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2. More impactful production (for increased consumption) of CR reporting content

A second trigger is client feedback or directly observing lackluster engagement at internal or external activities related to CR, likely because of the complex, technical subject matter and/or lack of creative communications expertise applied in implementation.

One possible solve is applying retailing principles – intrusiveness, engagement, an action orientation -- to produce/repurpose content of actual CR reports for “retail impact” at events, in social media, in employee communications, and in the customer experience.

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3. Increased communications effectiveness of CR reports

Another potential trigger is being able to gauge the communications effectiveness of CR reports in general as well as for different audiences. This includes investor relations’ ESG and/or CR communications with analysts and investors to prove an organization’s long term value and resilience to environmental and social change.

The solve to consider is qualitative or quantitative testing of full CR reports, themes, specific content sections to monitor, assess and optimize communications effectiveness.

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4. More integrated and efficient implementation

A fourth trigger relates to Corporate Responsibility being integrated into all parts of an organization versus being its own department/unit. “Digital” also started out as its own domain and was initially tied to IT, but now is an expected skillset across the board.

With many different organizational teams needing to come together to communicate about CR activities internally and externally to a range of stakeholders, complexity, process, limited resources, and politics become tangible obstacles for effective communications design.

A potential solve here may be a “train the trainer” program that teaches, facilitates, and, if needed, can service/coordinate a client’s various teams to support their CR communications design and implementation activities.

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